Budgeting is the art of keeping spending under control and it is the single most important money management skill.  It gives you an accurate picture of your money situation and makes it possible to make limited resources go a long way.  The main reason that people get into financial difficulties is that they don't budget properly .  It may sound very boring but it really is the best way to keep your finances on track and avoid getting into debt.

How Do I Budget?

First you need to draw up a budget plan. You can use the Smart Money budget planner. List the amount of money that you have, and then list what you expect to spend it on.  You'll need to decide whether to do this on a weekly or monthly basis.  If you get a student loan or grant then you'll need to work out how much this gives you each week or month, depending on which you choose.  If your budget is not balancing, then you'll need to about ways of saving money or you'll find yourself in debt.

Next comes the hard part which is to stick to your budget plan.  You'll find this easier to do if you keep a track of exactly how much you're spending.

Here are a few budgeting tips:

• When listing your expenditure INCLUDE EVERYTHING. This means money you spend on going out or on CD’s or clothes as well as on rent, bills and travel.
• Be honest about how much you spend.
• If your bills vary in amount then you need to work out an average weekly or monthly amount.  You may find it useful to set up a direct debit for a fixed amount each month.
• Credit is not income. For example, do not include money that you intend to use on a credit card.  The exception to this is the student loan as this does not have to be paid back until after your studies.
• PRIORITISE. If you are spending more than your income then you will need to look at where you can spend less money.  Certain costs are fixed eg rent. Other items are more essential than others. With certainr ‘lifestyle’ costs you may need to decide what is important to you.
• Keep a spending diary and record absolutely everything that you spend money on over a two week period.  This way you’ll know exactly where you’re money is going.
• Be flexible.  If you find out that you’re spending more on something than you included in your budget then change it to take account of this.  Again, this may well mean you need to cut down elsewhere.
• Your budget should reflect your goals.  If you are saving for a holiday or to buy a particular expensive item, then include an amount for this in your budget plan.

There are lots of good websites that give advice on budgeting.  Lots of them include budget plans that you can complete online.   MSN Money has a student budget calculator, and the Consumer Credit Counselling Service and Credit Action websites have lots of good information about budgeting as well as on-line budget plans.

You can also budget using your mobile with Credit Action's free Moneybasics Spendometer. (For all WAP enabled mobile phones) This way you can save writing everything down, set your own spending limits, and choose how your spending will be reported - daily, weekly or monthly. You can download the app here: http://www.moneybasics.co.uk/en/resources/spendometer.html

The Student Advisers can also help you plan a budget and make sure that you are receiving all the money that you are entitled to.

"The Smart Money initiative at the University of Westminster is part of a national project aiming to improve students' financial capability, led by the Consumer Financial Education Body (CFEB)"