Create a Budget for College
One of the best things you can do when you are in college is to create a budget for the school year. It may be the most important step after graduating from high school. Your college budget is similar to an annual budget, and it works well for college students because the cost of tuition and the expenses through the year will vary.
When you do this, you can have a set earnings goal that you work towards each summer. This can make it easier to graduate debt-free. It can also help you schedule your time effectively if you do need to work during the school year. It helps to look at the whole picture as well as a monthly budget when you are a student in college. A college budget can help prevent you from making the most common college financial mistakes.
List the Cost of College
When you are a college student, your biggest expense is likely your tuition costs and the fees associated with going to school each year. If you are living in the dorms, your housing costs will be set up as annual cost too.
The best way to start this budget is by listing these costs first. If you are living in on-campus housing, you can include that cost and your meal plan in this number. It can simplify the budgeting process. You should also list the estimated cost for books for each semester.
List Every Day Expenses
Next, you need to list the cost of your monthly everyday expenses. If you are living off-campus this can include rent, groceries, and utilities. You will need to create a category for clothing, entertainment (movies, weekend plans, parties, Spring Break trips), transportation and other expenses. It is important to budget for everything that you are planning to spend money on.
When creating these categories, you can estimate your monthly budget amount and then multiply it by the number of months you will be away for college. Then add in annual costs like Spring Break or Christmas presents. Avoid signing up for monthly contractual obligations that require you to buy out the contract to cancel them. These are often things like a television package, a gym membership or a cell phone plan. You can find alternatives that can save you money.
Create a Total for the College Year
Next, you need to determine the total cost for your entire year. You can do this by adding the two totals together. This is the amount that you will need to survive during the year. This total figure will give you a definite goal of what to work toward with your summer job and other jobs.
When you look at the total cost, you may be a bit overwhelmed. You may need to consider your summer job and whether or not it is paying you enough to cover college expenses. You may also need to take on an additional part-time summer job to increase the amount you earn over the summer.
Determine How You Are Going to Find the Money
It is important to consider all of the options available to you to help you pay for school. Student loans should be your last resort and only used to fill in the gaps if you run into issues earning the money through the summer and the school year. If your parents have saved money for you for college, you should try to divide that money between the four years of college.
Your income list can include college savings, summer job earnings, part-time job earnings, scholarships and grants, and students loans. You need to work to make the most of your summer job, so you do not need to work as much during the school year. If you plan on earning money each month to supplement your other earnings, you need to estimate on the lower end, because you may not be able to find a job that pays as well or has the hours available.
It is worth the time and effort to look for scholarships through private organizations or to look into tuition reimbursement through your job as well. Finding a good college job as opposed to working for minimum wage can really make a difference for you financially.
Follow Your Budget
Once you have outlined your expenses, you will be able to stick to your monthly budget. Since you will have saved up a lot of the money or you will get your student loan or Pell Grant in a lump sum, you need to be sure that you parcel it out correctly. Choosing the right accounts for a college student will make it easier to separate the money into monthly amounts.
Determine the amount you will transfer into your checking account each month to cover your monthly expenses and then leave the rest of the money alone. Avoid dipping into it for nearly any reasons, you do not want to spend the last two or three weeks of school starving because you have run out of money for the semester.
It is important to find the balance between graduating quickly or working and graduating with less debt, your college budget can help you do that. Be sure to keep looking for ways to save on your daily expenses to help you reach your goals.