Budgeting in College
Moving off to college involves countless new found freedoms. Many of us don’t get the chance to make a lot of independent choices until we are on our own for the first time. Some of these new liberties are more fun than others, such as no longer having your parents’ curfew or rules. Others take time to get used to, like making yourself get up in the morning and go to class. One new freedom in particular that many college students tend to have a hard time managing is their finances. Whether you are paying for college and other expenses yourself, your parents are paying, or your college experience is funded by a mixture of the two, it’s important to start learning how to manage your finances. It is a life skill you simply need to know, and college is a great time to start figuring it out.
The first tip to budgeting your money in college is to start with a game plan. Whether your parents are helping you or not, it is always a good idea to sit down with them before leaving for school to review and understand where you stand financially. Most incoming freshmen have had their basic living expenses paid for up until now. Once you leave home, however, you very well may be paying some of the bills, buying the groceries, or being responsible for far more of your own life than before. It is important that you brainstorm where the money for your college tuition and living expenses is going to come from.
The next step is coming up with a reasonable and realistic budget. Begin by deciding how much money you will have available throughout the semester. Include realistic estimates of income you will be making if you have a part-time job.
Next, make a realistic list of what a semester, or even a year, of school-related costs would include, such as housing, books, a laptop, pens, pencils, highlights, flashcards, binders, etc. Next, come up with a list of living necessities, including food, toiletries, clothes, and any other items you know you will need to live day to day. A third area to budget for is varying expenses. This includes expenses that can vary in cost like car insurance, auto repairs, gas, and cell phone bills. Once you have covered the basics, then make yet another list pertaining to your “fun” expenses like going to the movies, non-necessity shopping, or weekend getaways.
After you have come up with your lists, determine how much everything is going to cost for the year. Always aims higher than you actually think, prices are constantly increasing and things will cost more than you realize. A key to budgeting is being realistic! If you know you will spend around $1,000 dollars a semester on food, don’t assume you can get away with $750, this will set you up for failure. Once you have come up with a budget, it is importance to not let this be the only time you see it until next year. Review and visit this important document often to determine if you are still living within your means. Although it might seem weird because before this point a budget may not have been important to you, if you are living on tight funds in college, a well-planned budget will be your best friend.
The next key to successful budgeting is tracking your spending. Every month add up how much you spent and figure out if it is in line with your budget. Maybe you spent more on food or less in college books than you were expecting. If you go over budget one month, you can tighten your spending money for the next month to make up the difference, or if you manage to have money left over, you can add the difference to your “fun” funds! By keeping track of where your money is going, you will be able to prevent yourself from becoming broke. This will also help you keep track of how much you still have or start needing to save in order to finish each semester.
Like I said before, maybe your parents are paying for your college and you don’t need this type of thing. But one day you will have to start paying for everything yourself, so why not start treating your parents’ money like you would your own for some risk free practice. For those who are already paying for everything themselves as college students, budgeting will make your life far easier and help you better manage, if not save money during such a costly part of your life.