Going off to college might be your first experience of really having to budget. If you don’t have any experience of budgeting, you might feel as though you don’t know where to start, but it’s important for making sure that you can stretch your money to the end of each term. Learning to manage your money is also an important life skill.
The Right Mindset
The idea of budgeting might call up thoughts of deprivation, but that’s not what understanding where your money is going is all about. Think of it as spending smart, avoiding waste and having more to spend on the things that matter to you.
How to Pay for Tuition
If you’re like many people, you are paying for college through a combination of loans, savings and possibly some scholarships or grants. You might be planning to supplement this with a part-time job. If you haven’t thought about this yet, your first step might be to fill out the Free Application for Federal Student Aid, more commonly known as the FAFSA. This will give you an idea of the need-based federal aid you are entitled to. If it isn’t enough, you can also take out student loans from private lenders and repay after graduation. Adding together what you’ll have from all of these sources can give you an idea of how much you’ll have to spend monthly.
What Are Your Expenses
Start with a bare bones list of expenses, including housing, utilities and transportation. This doesn’t mean that you won’t have a budget for entertainment, but figuring that out will come a little bit later. Be sure that you don’t leave out textbooks, which can take a big chunk out of your budget. Once you’ve covered the necessities and know how much you need as a bare minimum to survive, you can think about how much you’d like for such discretionary items as streaming services and takeout. If your expenses exceed the amount you figured you’d have monthly, you might need to look at cutting back or find a way to get more money in, such as increasing your hours at your job.
How Are You Doing Overall
If you’re not yet in school, a lot of this will be guesswork, and that’s okay. You’ll probably need to adjust your plan once school starts and you get a better idea of your spending. There are apps that can track your spending and give you an idea of where your money is going. If you’ve just moved into an apartment or a college dorm, you’ve probably had some one-time expenses, so you don’t need to include those although you should account for other occasional costs, such as haircuts. After a couple of months, you can look at your spending and see if you need to make adjustments. Food and entertainment are usually the first places where people can easily cut back, but that doesn’t mean quitting everything that’s fun. Most people find things in these categories that they don’t realize they are spending so much on and won’t miss much when they’re gone. Keep making adjustments, and within a few months, you’ll be a budget-savvy pro.