It’s no surprise that college is expensive. College can be especially expensive if you don’t get grants or scholarships to help cover the cost and rely on student loans. Many students don’t realize that those loans need to be repaid with interest.
This means you’ll need to learn to budget your money and make every dollar count. Like most students, college is the first time you’ll be on your own. You can make your own decisions – eat what you want, go where you want when you want, and buy whatever you want.
Sounds exciting, right?
As exciting as it all might be, starting college also means new responsibilities. So, it’s important to start budgeting and planning right away.
We’ve taken the time to come up with some foolproof methods to help you save money and (hopefully) minimize your debt after you graduate.
Let’s get started!
First, list your sources of income.
Make a list of your expected sources of income during college. Write out how much you expect to earn if you are working, how much you will receive from your parents (if applicable), and how much you’ll be expecting to receive per semester in financial aid.
Input these numbers into an Excel sheet so you can easily organize and track the information.
Now, it’s time to figure out your expenses
Now that you have your income roughly estimated, it’s time to factor in your expenses.
Here are some things your list might include:
- Rent (if not covered by tuition)
- Utilities (gas, water, electric, etc. if not covered by room & board)
- Internet (if not covered by room and board)
- Cell phone bill (unless your parents or guardian are paying for it)
- Food – if you’ve never lived on your own, talk to a parent or guardian about how much they spent to feed you each week
- Clothes: you will likely need to take inventory of what you have vs. what you need and estimate how much you’ll need in spending on new school clothes
- School supplies: backpack, laptop, pens, paper, printer, and so on.
- Other expenses: this could be the money you want to set aside for going out and doing activities with friends
- Savings: Even if it’s a small amount, you should be putting money away every month. You never know when an emergency might arise and you’ll need cash fast.
Now that you’ve figured out your income and expenses, it’s time to do some math and see what you have leftover. You should subtract your total monthly expenses from your total estimated monthly income – if this number is positive, you’re in great shape!
If this number is negative, don’t worry, you just need to make some adjustments. Take advantage of student discounts, consider purchasing a cheap coffee pot instead of getting Starbucks on your way to class. Love eating out? Consider cooking at home instead or test out some fun dorm room recipes.
Now, for the budgeting tips
There are some additional tips too that will help you balance your budget.
- While living in the nicest dorm or apartment sounds appealing, you don’t need all of those bells and whistles. On average, rent should average 25-30% of your net income. Find somewhere safe and affordable!
- Take advantage of student discounts…. Everywhere! If you don’t know if a store offers student discounts — just ask!
- Coupons: I know this might sound silly, or old-fashioned, but coupons can save you so much money! There are coupons offered for everyday essentials like toothpaste and shampoo.
- Consider renting textbooks or purchasing electronic versions. This will literally save you hundreds of dollars each semester.
- Watch your credit card spending. It’s easy to lose sight of your budget if you continue to swipe your card without monitoring your balance. If you find yourself losing track of your spending, consider using cash so you can keep your budget on track.
The best way to get started with a budget is to know how much money you’re making and how much money you’re spending each month. You might not want to give up your daily Starbucks, and that’s okay. Start small by only getting Starbucks once or twice a week and making coffee at home on the others.
New habits aren’t going to be made overnight, so do what you’re comfortable with and before you know it, you’ll be living a budget life in style.