Learning how to budget for college can be intimidating at first: If you’ve never done it before, you might be lost at where to start and what to account for. Fortunately, Fresh U is here to help you with a few useful guidelines for creating a college budget, to help keep you as stress-free (at least financially) as possible.
1. Make a list of everything you’ll be spending your money on.
Yes, everything. This can include textbooks, groceries and any other personal expenses you may have — if you’re going to be buying a coffee every morning from the campus café, factor that in, because those $2-$3 are going to add up pretty quickly. Calculating all of your expenses may seem like a daunting task, but you’ll be grateful when you have an exact estimate of how much money you’ll need.
2. Designate items as necessary and unnecessary.
While you can obviously spend what your budget allows on items you want and need, designating certain items as absolute necessities and others as ones you don’t always need will help you in the long run. If there’s ever a week where you don’t earn as much as you normally do (maybe you get sick and have to take a day or two off work), or where you have an unexpected expense (maybe your car breaks down and needs to go into the shop), it’ll be much easier to move numbers around to make sure everything you absolutely need is paid for if you know offhand what items you can skip.
3. Budget for each pay period.
Making a budget for a shorter length of time is often more efficient than a longer budget, because it’s easier to anticipate what you’ll need at the end of a month than the end of a year. Make a budget for the duration of time which you get paid for (every week, every two weeks), and work on your expenses for that block of time. You’ll be able to more accurately predict all of your expenses, and if your spending changes seasonally, you won’t have to worry about going into a yearly budget and changing money around.
4. Only add in your income when you know exactly how much money you’re going to make.
It may be tempting to estimate your income based on previous years’ information, but the truth is that college is different and you may end up working fewer hours than you did in high school. You also may wait until a few weeks into the semester to begin working. Wait until you know exactly how much you’ll be making for a given time period before you budget your income.
5. Keep a designated emergency fund factored into your budget.
Sometimes unexpected expenses come up that can’t be covered just by removing unneeded purchases. Reserve some money in your savings to be used if you have an emergency that needs to be paid for immediately.
6. Budget for social expenses.
Some people may forget to budget things like nights out and other social expenses when creating a budget, but those are the expenses that will eat up your money the fastest. Figuring out exactly how much money you spend on socializing can be tricky, but with some good estimations and some trial and error, you’ll be able to figure it out.
7. If you’re saving up for a large item, be sure to allocate savings.
If you know you want to buy a car at the end of freshman year or move off campus once you’re a sophomore, that’s something you need to start saving up for right away. Calculate how much money that item’s going to cost and how much you’re going to have to save up (each month, each week), to afford it on time. Once you’ve done that, you may need to rethink when you’ll be purchasing the item, but at least you’ll have a plan.
8. Keep track of loans.
Student loans are the bane of every college student’s existence, and for good reason: They’re stressful, they’re daunting and they’re very hard to understand. It’s important to keep track of how much money you’re borrowing, however, so that you understand how much you have to pay back and when. Write down how much money you owe and when you have to pay it back. (For the record, subsidized student loans begin accruing interest while you’re still in school, while unsubsidized student loans don’t begin accruing interest until after you’ve graduated). Interest is important to take note of, because it can add up before you’ve even realized that you owe money.
9. Remember transportation.
As a college student, you’re going to be doing a fair amount of traveling. Are you driving everywhere? Make sure to account for money spent on gas, insurance and maintenance fees. Are you using public transportation to get around your city and travel home for breaks? Note how much the train or bus costs, and include transportation costs in your expenses.
10. Be brutally honest with yourself.
You may not want to admit how much money you spend on certain things (buying new clothes three times a month), and instead be tempted to write down less money than you actually spend on certain expenses. Do not do this. You’re going to find yourself in a very tricky situation when the end of the week comes around and you don’t have money for groceries, all because you didn’t want to admit that you regularly order $40 worth of items from Amazon. If you write down a number and it makes you gasp, you may want to take that as a sign that you should reduce your spending in that particular area.
As the start of the semester gets closer, giving your personal finances a thought (or several) may be a useful idea. I promise you, you’ll be grateful that you gave some forethought to your earning and spending when it’s finals week and you actually have the money to buy that $6 latte to keep you from being completely dead inside.
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