College is synonymous with young people trying to assume greater responsibility in managing their own finances – very far from the security of their mom’s or dad’s wallets. We will discuss a few college budgeting tips that can help college students form a strong foundation for management of their finances.
1. Be Realistic on your Budget.
If you have never prepared a budget before, you should begin by forecasting on how much cash you will have coming in each month as well as how much cash you think you will be spending per month. Remember that the more realistic you are about these figures, the greater the likelihood that you will be able to stick to the budget.
2. Include a miscellaneous category within Your Budget.
Take all your expenses and add them up. Then, take about 10% of the total and place it to a “miscellaneous” category. This will add even greater flexibility to the budget, helping to make sure that in case you have omitted anything from the calculations, you will not go over budget.
3. Include your savings as an expense In Your Budget.
Set an amount you would like to save every month, and have it as an “expense” within your budget. Set a separate saving account up and deposit or transfer money into it each month.
Use this simple 1 page tri-fold that illustrates the step-by-step budgeting process for college.
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Your savings may be used for the short term goals (for example vacations or large-ticket items) or long term goals (for example a house or college tuition). You can later use this money in case of emergencies, such as medical or car repair expenses.
4. Differentiate between wants and needs in your budget.
Particularly if you are money tight, differentiating between your wants and needs will help you stay in budget. Needs should come first, and in case you still have money left over, it can then be spent on the wants.
5. Pay Cash For the Small Expenses.
Give yourself a monthly, weekly or daily cash allotment and use it whenever you can. Each time you pay that cash, you will be much more conscious on what you are spending compared to if you pay by check, credit card or online withdrawal.
College can be very expensive, but if you learn the basics of money management now you will avoid graduating with massive debt. By laying the foundation and groundwork for smarter budgeting and improving your spending habits while still in college, you will be able to handle responsibility and accountability – lessons which are very important in life.
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