There is a lot of independence that comes with going off to college – from
parents, high school teachers and that old summer job. But there’s also another type of independence that comes with a lot more responsibility: financial independence.
Having solid financial goals as a college student will serve you now and later in life. For instance, you do not want to use a
student loan to pay for basic living costs. Student loans should be used to pay for college tuition. You will have to pay these loans back after graduation (Paying back a student loan, with accrued interest, for an outfit purchased three years ago will disappoint you later.).
Your student budget could create a lot of stress as you navigate paying for food, meal plans, clothing and other miscellaneous costs on a limited income or allowance; but if you prepare yourself for living on a
college student budget beforehand, the task will seem much more manageable when you arrive on campus.
As you start your college adventure, be sure you have a realistic personal-finance plan in place. Even a basic financial plan is better than having no plan at all.
Talk with your family about a budget.
If your parents are contributing financially to your student budget, sit down with them before school begins to talk. Chat about the amount of money they plan to contribute on a monthly basis. Even if they are not giving financially, it is important to involve them in your plans. After all, they have been living on a budget for quite a while now, so no doubt they will have some expert advice.
List all sources of “income.”
Now it’s time to sit down and begin your budget. First, consider all sources of income you may have outside of
financial aid or assistance that is going toward your tuition, room and board, etc.
Include any bank accounts, savings accounts, or a
529 college savings plan you or your family have established to help save money for your college days.
Create a budget.
We’re just talking about your everyday expenditures like food, clothing and entertainment. List dollars coming in from your work study or part-time job, Mom and Dad and any other ways in which you may be generating an “income.”
Estimate how much you will spend on each per month and jot it down in a spreadsheet. Typically, students spend their money on groceries or meals at restaurants, personal care, transportation, clothes, cell phone and entertainment.
If you’re unsure, keep track of your spending for a few weeks. This will give you an accurate picture of where your money goes and how you can designate your “income.”
If spreadsheets are not your thing, check out a few budgeting tools! There are many budgeting apps available. Having these tools with you at all times is a great way to help you stay on top of your college budget plan.
CNBC lists Goodbudget as one of the best apps for students just learning how to budget.
Mint and
EveryDollar are two other budgeting apps that rank in the top 100 of Apple’s App Store finance tools.
Plan and save.
Occasionally, an emergency comes up for which you will need money – whether that’s an unexpected book for class or a trip to the emergency room. You do not want to jump to
credit cards to help with these unpredicted expenses!
That’s why you need to set aside some money for savings from your monthly “income.” Evaluate your budget spreadsheet to find ways you could save money for an emergency fund.
Be real with yourself as you look for opportunities to save extra money. For example, do you need to be spending money on monthly app subscriptions? Are there any of these you can drop?
Most college campuses allow students to use a campus debit card, which holds money for meals or campus convenience stores. To control your spending, try to do as much spending as possible on campus rather than off-campus.
After all, this
money is coming out of your room and board costs anyway. If you want to grab a meal with friends, do it on campus. Essentially, exhaust all your options on campus before heading off campus to make purchases.
