New survey reveals students are more likely to stick to a formal budget than their parents or grandparents.
University will be the first time in many students’ lives that they have to pay rent, bills, and balance spending money between books and booze.
Despite their relative inexperience in looking after money, SunLife research suggests that students are actually on the ball when it comes to budgeting, driven largely by the necessity of living on limited loan and/or grant payments.
In fact, the survey reveals that 57% of 18-24 year olds make a formal budget, compared to only 32% of those aged 65 years and over.
Are students really better at budgeting?
Dean Lamble, managing director at SunLife, suggested that living through the credit crunch, which started around the time many of this generation began to take some responsibility for their finances, has had a huge effect on how they view money.
Coupled with the rising cost of attending university and the resulting debt, this generation of young people are evidently very savvy with their finances.
Rupesh Parikh, who is about to start his second year studying Economics at LSE, told loveMONEY that he uses his bank's mobile app to help him budget. He said that it's an effective way to keep an eye on his money, and that it's convenient as it lets him transfer money easily between his accounts.
He also uses Splittable, an app which allows him and his housemates to share out responsibility for bills.
[SPOTLIGHT]Without using these apps to help him budget, he said he would definitely be worse at managing his finances.
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The finances of the young and old
Those under the age of 34 tend to be the ones taking advantage of budgeting apps on their phone or tablet to keep their money under control. Around 13% of 18-24 year olds and 8% of 25-34 year olds said that they used these tools.
In comparison, only 1% of 55-64 year olds, and nobody in the survey over the age of 65, said that they used such apps, though 1% of each group used an online tool.
After decades of experience in managing their financial situation, over-65s are likely to be well aware of their financial situation and know how much they can spend without going over the top. This would explain the 45% of respondents in this age group who said that while they don’t keep a formal budget, they have a clear idea of what’s going on with their finances.
Are you missing out?
However, even people with a good grasp on their finances can benefit from new tricks that will let them keep an eye on their money. Rupesh thinks, for example, that his grandparents would find on-the-go reminders and updates useful.
Many banks now offer their own app, which will give you an idea of how much is in your accounts and let you make payments on the go, and some offer budgeting and spending breakdown charts so you can see exactly what you’ve spent your money on from month to month.
There are other budgeting apps out there that aren’t run by your bank, but you will have to pay for some of these. If you’re already a dab hand with spreadsheets and your bank’s app is of lacklustre quality, you might also consider using Google Sheets or a similar tool, instead of an app built specifically for budgeting.
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