Managing a budget sounds scary, especially if college is going to be your first time away from home, but it’s not so intimidating once you get the hang of it. All you have to do is spend less than you earn each month!
If that doesn’t sound so easy, we have some tips to help you out.
Calculate Your Income
The first step to preparing a budget is adding up all your sources of income. Whether it’s from a part-time job, work-study, a scholarship or a parent helping you out, add it all together to figure out how much income you’ll have each month.
That was the easy step. Now comes the trickier step.
Assess Your Expenses
You will have certain fixed expenses every semester, such as tuition, dorm fees, utilities, meal plan and groceries, and transportation costs. You should have a fairly clear idea of what those are before the start of the semester, as your school will provide you a comprehensive rundown.
There are, however, variable expenses that are not going to be so transparent. Books, entertainment, and medical expenses can all vary from semester to semester, so you will want to give yourself a little extra wiggle room and over project your expenses when preparing your budget.
Save for emergencies
You never know when an unexpected expense will pop up, such as a computer or car repair, or worse, a trip to the hospital. Save a little each month to prepare for an emergency, all the while hoping you won’t ever need to use it.
Balance Your Budget
Now that you’ve added up your expected income and your expected expenses, it’s time to asses the big picture. If you have more income than expenses, you’re in good shape. If your expenses outweigh your income, you’ll have to find ways to trim your costs.
Use a budgeting tool like Mint to help you keep track of everything – it will sync with your bank account and credit card to tally up all your incoming and outgoing payments, making it easier for you to visualize your budget.
Find Ways to Save
Analyze all of your expenses and see where you can cut back. Cooking your own meals is cheaper than dining out, and taking public transportation is cheaper than owning a car. And always look for student discounts to save on everything from meals to haircuts to entertainment.
Saving on textbooks
Textbooks can be one of the more onerous expenses for a college student, but there are ways to save big when purchasing your books. Consider renting your textbooks, shopping online at websites like Chegg or Amazon, and sharing with classmates.
Spending your financial aid refund
If you’re due to receive a financial aid refund, make sure to be wise with your newfound solvency. Remember, your financial aid was awarded to you to pay for school expenses — tuition, books, room and board, and other essentials.
It can be tempting to use your financial aid refund check on concert tickets, new clothes, or Spring Break. Don’t. Make sure all of your school-related expenses are covered first. If you’re comfortable financially, consider paying back some of your refunds if it came from a student loan. It will be less money (and interest!) you have to pay back after college.
Watch out for hidden expenses
As you become master of your finances, you’ll find a lot of hidden fees and corporate “gotcha” charges can drain your bank account quickly. In fact, your bank account itself can be one of the biggest offenders.
Many banks charge their customer a fee for owning an account, failing to maintain the minimum required balance, and spending more cash than you actually have in your account (overdraft). Make sure to may attention to your bank agreement so you don’t run afoul of any of their hidden fees.
Subscriptions and auto payments can be a great way to make your life easier each month, or they can take money out of your account for a product or service you aren’t using. Don’t forget to cancel any subscriptions you don’t plan on using and monitor your bank account monthly for anything you might have missed.
As you fine-tune your college student budget, don’t forget that scholarships and grants can help you save, too. Know how to get financial aid and set yourself up on a financially sustainable path in college and beyond.