New year budgeting tips for students

The winter break is a time of joy and celebration. It also provides the perfect opportunity to relax, reset and focus on the new year ahead.

However, entering that new year can quickly bring about a host of new stresses, particularly when it comes to finances. After a season of socialising and festivities, many people can head into January lacking funds. This is particularly true for students who may have spent a bit more than they should have in their first semester.

Regardless, 2026 is time for a new start. We’ll cover lots of tips to help you budget effectively and what pitfalls to avoid.

Financial issues for students in the new year

While for many, funds might get topped up with the next installation of student loans, coming back from the winter break can bring notable challenges, particularly with the colder months ahead.

Rising bills

It is now reported that 78% of students consider utility bills to be their biggest expense after rent. This is in line with the 22% increase in energy costs compared to 2023, with bills totalling between £110-£165 on average for students in 2025. The cost and concern over the price of bills is very real and these concerns only grow in the winter months such as January and February. With darker and colder days comes a greater need for heating and lights, meaning higher energy bills.

Low funds after the holidays

All the festivities that the winter break can bring, such as reconnecting with family and friends, can quickly add up. Add in the cost of gift giving for those who celebrate Christmas, and any saving efforts made across the first term can be depleted. It can leave students in a position where they can only afford the essentials, having to take on additional part-time work or even dipping into their overdraft, making it more difficult to escape debt. Navigating the financial challenges of this part of the year can be stressful and may require some clever budgeting and support if necessary.

Budgeting methods

While it isn't always easy to plan ahead with finances as a student, there are some effective methods to help understand the costs for essentials, socialising and budgeting, while also leaving room to save.

Here are some of the most effective methods for both budgeting and saving whilst on a tight student budget:

50/30/20 rule

One of the more simple and effective methods to budget before breaking things down into further subsections is the 50/30/20 rule. The principle of this rule is as follows:

• 50% on essentials: Whatever the income from your loan, bursary, grant or any part-time work might be, 50% of that should be put towards living essentials. This includes rent, bills, groceries, transportation, course resources, etc. Having these funds set aside and ready for the essentials provides a basis for further budgeting for socialising, luxuries and savings
• 30% on wants: This section of your budget will focus more on things that you use or want to do for enjoyment. This might include streaming services such as Netflix, going out, buying new clothes, and the like. Putting a limit in place on these things enables you to still be able to enjoy yourself, without running the risk of overshooting your essential spends
• 20% on savings: Sometimes, unexpected costs can throw any budgeting plans out the window. That's why it is always useful to build an emergency fund for these situations. Putting away 20% of your monthly total into savings can provide a sense of security and protect you from unexpected costs and possibly set you up to assist with any debts you may have accrued

The 1p challenge

It may seem like a small and ineffective method of saving, but the 1p challenge can quickly build up a healthy base for your savings. It is a simple method of saving a penny for each day of the year. For example:

• Day 1: Save 1p
• Day 2: Save 2p
• Day 3: Save 3p
• ...
• Day 365: Save 365p (£3.65)

It's a simple and affordable method of saving, with the end result leaving you with savings of £667.95. Challenges like these are simple, easy to track and provide a basis for saving, which allows for more effective budgeting and planning in the new year.

Top budgeting tips for the new year

Knowing the pitfalls and having a better idea of how to budget and save provides a basis for improved budgeting that works for you. Utilising some of these tips can help stretch your student loan and keep you financially secure in the new year:

1. Review your expenses

While budgeting and having specific spending amounts in place is the basis of a managing finances, maintaining a budget can be easier said than done.

Expenses will always pop up for students. Whether it is new course equipment (such as specific reading materials or practical equipment) or an emergency bill. Keeping track of outgoings lets you know where you stand financially, and you can adjust accordingly when you need to. You can also review expenses that you might deem unnecessary. Whether it be spending on a subscription you don't use or buying books which are available from the library.

2. Set achievable financial goals

Whether it be saving a certain amount each month, having a particular purchase in mind or simply clearing an overdraft, it is always good to set achievable goals with your finances as a student. Not only can it help you become more financially responsible, but it will set effective limits on spending as you aim to achieve your goal. The previously listed examples of saving challenges are a good way to help students achieve these goals in an affordable manner, taking the pressure off making big savings that limit opportunities to socialise and do what you enjoy.

3. Shop smarter

With the new loan instalment coming in, you now can review shopping habits and see what is within budget for yourself. This might involve reviewing where you do your grocery shopping and if there are cheaper, non-name brand alternatives that you can purchase instead. These might be small changes in the short-term but can quickly accumulate and save some essential funds for the future.

4. Make use of student discounts

As a student, you will have exclusive access to student discounts. Using websites such as UNiDAYS and Student Beans provides you with discounts to specific retailers, which can help relieve any financial burden when it comes to shopping for essentials and luxuries. As well as this, there will be specific student venues such as the student union which can be handy and cost-effective social hub. Some of these discounts are only available to you as a student, so it is best to make use of these amenities whilst you can.

5. Get support

Sometimes, despite our best efforts, the costs of being a student can become overwhelming, and a budget can unfortunately collapse. In these instances, it is important that students are aware of the support that is available to them. It is worth finding out and seeing if you qualify for additional grants and bursaries to supporting with costs, debt and budgeting. In times of extreme financial difficulty, you may also qualify for the student hardship fund to help support you during this difficult period. However, if you are just seeking advice on how to budget effectively, you can contact your dedicated student counselling team, or ask your institution if they have a Student Assistance Programme to speak to a trained counsellor.

How a Student Assistance Programme can support with budgeting

If you are struggling with budgeting or your financial difficulties are beginning to negatively impact your mental health, you can access expert support using HA | Wisdom Wellbeing’s Student Assistance Programme (SAP). With access to a 24/7 counselling helpline, 365-days a year, including a dedicated financial wellbeing support line, you can you overcome the financial challenges you may be facing. As well as this, in partnership with Munny, you can access expert financial coaching and guidance. Understanding the complexities of money as a student and what makes for an effective budget can be difficult. With Munny's support, these issues can be addressed using a tailored and bespoke methodology, ensuring you can keep your finances in order and on track.

Conclusion

It can be challenging for some individuals to manage finances as a student. Without proper planning, the realities of financial hardship can hit you very quickly and come as a shock as your mental health takes a hit. This only become more difficult in colder months as things become more expensive during an already expensive time due to the Cost-of-Living Crisis. It’s for this very reason that the new year should be seen as an opportunity to establish a reliable and effective budget. Using just a few of these tips, you can set yourself up for all the financial challenges you may face for the rest of your year.