Budgeting For College Students - Brink's Money
Budgeting For College Students
08 Mar 2021
College is a fun time and some of the most transformative years of your life. Going to college can also be your first experience of living on your own and taking a step into adulthood. With more adult responsibilities comes taking care of your finances and figuring out what you need to spend your income on and avoid overspending. This is why it is highly important that you learn how to manage your money effectively. Healthy money skills can help you work toward reaching your financial goals.
At Brink’s Money we want to give college students a helping hand so you can get a head start on developing financial habits for the future.
Talk to Your Parents
Before you try to figure out your finances or how you’ll create a budget while in college, the first step is talking to your parents or whoever is financing your education. Having a conversation will initiate communication about your situation and ensure that everyone is on the same page and up to date. Your parents can offer great advice about budgeting and being cautious about your money since they have experience and have been in your shoes before.
When talking to your parents, you should discuss whether you’ll need to find a job or if they will help you with additional expenses. Also, they can help you create an outline about the kind of expenses you can expect when you move to college and then decide who is responsible for paying which expense.
Before you step onto campus, it’s important to take into consideration what expenses you already account for and what new expenses you should be aware of when creating your student budget. As a result, we have compiled a few expenses you might consider.
School supplies and textbooks. Odds are you’re going to need to buy textbooks which are essential to your education along with any other supplies necessary for classes. It’s important to set aside money for textbooks.
Housing. Accounting for housing is different for everyone based on whether you choose to live on campus in a dorm or move off campus. Nonetheless, you should have a plan as to how you’ll pay for rent each month or housing per semester.
Food. Perhaps one of your most important expenses is food. When it comes to food, you should have in mind how much you ideally want to be spending on food each month so you don’t find yourself overspending.
Transportation. Depending on the size and location of your campus, you might need to commute to class which means you’ll need to factor in the price of a vehicle into your budget. If your university offers campus transportation, then try to make the most use out of it.
Entertainment. As you transition into your college life, you’ll want to balance your studies and your social life and with that comes factoring in money for entertainment and fun. When creating a budget, it might be helpful to set aside an amount of money that is used specifically for going out.
Track Your Spending
An essential financial skill to to practice regularly is to keep track of your spending. Tracking your spending will ensure that you are sticking to your budget. Keep in mind that as you get a better understanding of your spending, you can adjust your budget to meet your needs.
If you find that you do want to track your spending, there are a number of digital tools you can use to make it easier for you. Through your mobile device, there are numerous free apps that can help you hold yourself accountable and put you in better shape to reach your financial goals. If you prefer to not use digital tools, you can always track your spending in a notebook or journal. It might be more time consuming to track by hand but could be helpful to make you more aware about where your money is going.
Creating a College Budget
As a college student and when you graduate from college, depending on your situation you could be facing debt. One way to help prepare yourself for paying off that debt and reduce the potential financial stress of paying those loans is to create a budget while you’re in school. A college budget can help you determine what you are worth spending money on, what your needs are, and plan out both short and long term financial goals.
When creating a budget, you need to consider your current financial situation including determining how much money you have in your bank account and what your recurring monthly expenses are. After listing out your monthly responsibilities, you should categorize these expenses based on whether they are a need or a want. This will help you figure out what expenses to prioritize and what expenses you could eliminate.
Once you distinguish between your expenses, your next step should be to add all your necessary expenses and subtract it from how much your monthly income is. When you subtract, this number is your discretionary income or how much money you have available to spend. You will then have to decide how that discretionary income will be spent.
Tips for Saving Money
As you get a better understanding about the type of expenses you’ll be responsible for during your time in college, you’ll become more familiar with different ways to save money. Although you’ll be living on a tight budget, it may seem difficult to save even more money but it’s not impossible. Here are a few tips to help save extra money.
Rent or buy used textbooks. Instead of buying new textbooks, try looking for second hand ones that will oftentimes be more affordable.
Find roommates. Housing or rent is perhaps one of the more expensive costs in college. To save you money, you might consider living with roommates. This way you can share the costs of rent and utilities among other expenses.
Look for free food. College students love free food and that’s why most on campus events offer food to draw you in. It’s worth going out and seeking these opportunities to help you save money on food expenses.
Take advantage of student discounts. Your Student ID may help you get in and out of buildings on campus, but it can also be used for student discounts. A number of stores and restaurants offer discounts to college students when you present your ID.
As you start moving towards adulthood and heading to college, you’re going to be taking on more financial responsibility. With financial responsibility comes developing smart money management skills and figuring out how you should spend your money. Working on a budget and keeping an eye on your spending now will help set you on a solid foundation for financial success later in life.
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