Tips for Balancing a College Student Budget
Setting a college student budget is key to having a stress-free year. Unfortunately, too many students overspend and end up in a mountain of debt. Learn how to balance your budget with these helpful tips.
It’s no secret that a college education doesn’t come cheap. There are many reasons why this shouldn’t be the case (here are just 6 reasons why college should be free), but the reality is that it isn’t. As of 2017, the average cost for room and board at a 4-year public university was $10,800 per year. Over four years, that works out to nearly $44,000 (and that doesn’t include tuition or other expenses).
The point is this: It’s essential to have a college student budget in place before you head off to college. Many students arrive on-campus completely unprepared for the costs of real-world living. If you’re looking for financial tips for students, you’ve come to the right place. In this post, we’ll outline five expert tips to help you make and stick to your college student budget.
Track Your Current Spending Habits
How much money do you currently spend every week? If you can’t come up with a quick and accurate answer, you’ve got some work to do and explore the reasons why college should be free. With so many tracking apps available these days, there’s no excuse not to track your spending habits. Download your bank’s mobile app, or use a popular one like Mint or Wally.
Your next step is to enter everything you spend your money on for at least a month – preferably longer. Those new sneakers or that late-night run to Taco Bell? Yep, including those expenditures too. What you need to create is a realistic portrait of your spending habits, not an idealistic one. This allows you to see where you’re actually spending your money instead of framing a budget based on guesswork.
And if you see areas where you can improve your spending habits, even better. If you haven’t already, you need to have a proper talk with your parents (or parents with their teen) about money matters during college. If you’re not sure how to get started, you can learn more here.
List All Sources of Income
This might be trickier than it seems at first. First, you need to list every source of monthly income you receive, including:
- Money from parents or other family members
- Wages from your job or work/study program
- Financial aid
Your next step is to break everything down into categories. Then, make a list of all your necessary expenses, such as:
- Rent/room and board
- Tuition/education costs
Now it’s time to get down to the nitty-gritty of creating your college student budget. Make sure you have enough money coming in to cover your essential costs like housing, food, and tuition. It would help if you also planned to set aside a little bit for savings each month. Even if you can only save $5 a week, it will add up over time. Even better, it will get you into the lifelong habit of saving money.
Of course, you’ll need some downtime while you’re in college too. Factor in the occasional night out with your friends, but don’t spend more than your budget allows. Many college students have blown all their extra money on pizza and beer–only to exist on Ramen noodles for the rest of the semester. Don’t let this happen to you!
Cut Costs Where You Can
You can’t do anything to change the cost of your tuition or room and board. But there are other ways you can cut down on expenses and create a more manageable budget. For example, are you going to college in a city with excellent public transportation? If so, you may be able to get by without a car. Not having to pay for car payments, insurance, and parking can greatly help your college student budget.
What about your living arrangements? A roomy off-campus apartment may look appealing, but the price tag could break your budget. Stick with an on-campus living arrangement with one or more roommates to save on room and board. Another place to reduce costs is your textbooks. Used books are sometimes half the price of new textbooks, so buy used where you can.
Consider a Part-Time Job
Research shows that students who work a reasonable amount through college tend to perform better academically. So even if you only work 8-10 hours a week, that bit of extra cash can go a long way in stretching your college student budget. It will also give you an appreciation for earning your own money and choosing what to spend it on.
Your university may offer a work/study program. Or you may be able to find a paid part-time position on campus. An advantage of these positions is they often include a lot of downtime, allowing you to study or do homework. Holding down a part-time job while in college will also become a gold star on your resume. It shows future employers that you can successfully multitask and manage your time well.
Establish Credit (But Beware of Scams)
Speaking of the real world, college is also the time to start establishing your own credit. This can be challenging if you’re not working, but there are some steps you can take. For example, your parents may be able to add you as a user to one of their credit accounts. You could also make some money from savings and open a secured credit card with that amount.
Whichever route you choose, you’re one step closer to setting yourself up for financial success. Once you graduate, your credit history will dictate what type of home, car, and lifestyle you’ll be able to enjoy.
With this advice comes a word of caution, though. Because college students are inexperienced in the financial world, they’re a prime target for aggressive banks and credit card companies. We’ve even heard of college students donating sperm or eggs in exchange for “quick cash.”
Don’t sign up for anything unless you know exactly what you’re getting into. If you’re uncertain, talk to your parents or another trusted adult. Remember: The way to financial success is to stick with your college student budget. Don’t allow yourself to become sidetracked by shiny new credit cards or other ways to earn “easy money.”
College Student Budget Success
Your education is one of the most important decisions you’ll ever make. The way you finance it and handle your money during that time is equally as important. With these college student budget tips, you’re now one step closer to earning your degree. Looking for more helpful college advice? Check out this post on how to be happy while you’re in college.