A budget is a critical tool for college success. You should start working on your college budget early so you have as much time as possible to fund this important period in your life. Start saving in high school and you can build a healthy college fund to cover everything from coursework to study snacks when you get to school.
Know Your Needs
Before you can successfully budget for college, you have to figure out how much you’re personally responsible for. To do this, you must figure out:
- Tuition expenses at your school
- The cost of room and board
- Your family’s expected contribution, as indicated by the FAFSA®
- Your financial aid reward package
You’ll get this information from your prospective schools after they’ve received the information from your FAFSA. If you’re budgeting for your college expenses early, you may need to estimate your financial aid rewards and expected contribution.
Talk to your family members about how you plan to pay for college. Do you have a savings fund in place to cover some of the expenses? Will your parents help you cover outside expenses like fuel and car insurance? Are you planning to work through college for extra money? How will these funds and finances be organized? Iron out the details early.
Search for Scholarships
Federal grants and school aid may help ease the burden of your college expenses, but you’ll probably find that there are still some costs that go uncovered. Scholarships are the best option for filling these gaps. You can begin applying for scholarships in your sophomore and junior years of high school.
Though you won’t have a complete picture of your college expenses at this point, you should still submit as many applications as possible. The more you can secure in scholarships, the more you’ll free up for other expenses once you’re enrolled.
Plan for Extras
One of the biggest mistakes students make with their college budget is to overlook extras and everyday essentials. If you’re planning to live in a dorm and use the school’s meal plan, you’ll reduce your hidden living expenses, but you won’t erase them entirely.
What happens when you want to order a pizza with friends? How will you pay for those ongoing necessities like soap, shampoo, or mascara? Did you include an allowance for your Starbucks fix or new clothing and shoes?
If you ignore these expenses entirely, you’ll likely find your budget falling apart once you begin living the college life. Give yourself an allowance for these items and it will be much easier to stay within your means and keep your finances on track.
When you’re estimating income and expenses for your college budget, stay conservative. Estimate high for expenses and low for income. This way, you’ll set yourself up for some pleasant surprises if you earn more than expected or come in under your projected living expenses. If you’re too generous with your estimates, you’re more likely to end up in the red when you put your plan into action.
Estimate conservatively for financial aid as well. There’s no guarantee on how much you’ll receive in federal grants or school assistance until you have these funds secured. If you’re budgeting early in your sophomore or junior years of high school, plan for little to no financial aid and focus on securing scholarships to fill the financial gap.
Your budget isn’t something you should set and forget. Think of this as a living organism that changes and evolves over time. Check-in with your budget monthly and see where you stand. If you’re still in high school, track how your savings are stacking up.
You may have investments to follow or a savings fund you’re growing with contributions from an afterschool job. Perhaps you’re building a nice stockpile of scholarship money.
Once you’re in college, you’ll need to focus more on your expenses. Are you spending within your means? By tracking your income and expenses regularly, you can adjust early before you’re deep in debt.
If you’re spending more than you’ve budgeted for, respond promptly with a plan to either cut back on your expenses or increase your income with a part-time job between classes. Get to know your budget intimately so you can stay on course through your college career.
Keeping your budget on track is no small task. You’ll need to practice constant vigilance to make sure your money is where it needs to be. With the right approach, however, you can fund your college career successfully and you may even find some funds to spare.