Playing Grownup: Budgeting for College Students
Hurray! You've made it to college! You're independent! You're... totally at a loss at how to create a budget. That's one of those pesky parts about growing up you might have been told about, but had no idea it was this challenging. What makes it such a pain for college students, is that we typically don't have much to begin with, let alone know how to plan for that spontaneous 3 am pizza craving. It's confusing and tricky, but it all begins with simply monitoring your habits and spending.
Fill out your FAFSA
FAFSA stands for Free Application for Federal Student Aid. College is more expensive now than it's ever been, so it's imperative that you make sure you are prepared to pay for it. Everyone is eligible for some time of financial aid for college, so always submit your FAFSA before the semester begins. You can either submit your FAFSA free online or through a tax preparer. Keep track of any and all financial aid you receive, including scholarships and private loans.
Next, find out what your tuition will cost, and text books and materials related to the classes you will be taking. If you haven't noticed yet, textbooks are expensive, and you will need to save for them. Other related expenses will most likely be for computer software, notebooks, writing utensils, ect.
Get realistic about spending
If you still live with your parents, chances are your spending habits are a little more frivolous because you're rent free. If you do take care of some bills, you're not completely supporting yourself yet. Even those of us who live on our own are terribly guilty of wasteful spending and feel even more guilty because it's hard to explain why you just ate the gas money. Be honest with yourself about your spending habits, and write them down.
Online banking makes it easier
I'm a huge fan of online banking! This is mainly because I remember trying to keep track of spending before it existed (Hint: It involved a lot dumpster diving for receipts). Accurate and up to date information about your checking or savings account will be compiled for safe keeping and reference on your bank's website. Look through all your recent transactions to get an idea of just how much shopping you could probably live without.
Make a list
Budget worksheets like this one will help you to see how much income you're earning, as well as how much your cost of living is. Consult your banking statements to see your spending trends over a period of a month, and log it into the budget worksheet. It may look a little sad at first, but I'll give you some tips on how to reign in any excess spending.
Making the necessary cuts
Once you've laid out all your expenses and income, take out a red pen, and get ready to make some decisions! Chances are, you're not setting aside nearly as much as you should be because of extra spending here and there. Making a choice on precisely what you'll be spending non essential monies on each month will help make it easier to save. For me, it was a cable and internet bundle. I generally don't watch much television, so it was a waste to have a DVR and 300+ channels. I still needed wifi, so I
switched to a contract free mobile hotspot. As a result, I'm saving almost over $100 a month.
Everyone's “splurge” items are different. Do you go to the movies a lot? What about weekend shopping trips? Should you stay away from Amazon.com for a while? All it comes down to is deciding what you can definitely live without.
Food and the lack of it
When you get busy, it can be easy to forget to eat, but definitely do not forget to add groceries to your budget! If you're not stocking the shelves regularly, you'll need to refer to your banking statements to see what you're spending on food. Eating out can be costly, but it's also not good for you! You're more likely to spend less money and eat better if you prepare the majority of your meals from store bought food.
Other times it can be hard to budget for groceries if you're still new to the idea of even buying food for yourself. If you can avoid it, try not to buy “brand name” edibles. Trust me, Kraft macaroni and cheese is really no better than the store brand. Shop smart by paying attention to the expiration dates on perishables. Lastly, only buy what you need. Grocery shopping for yourself will take some getting used to if you're on your own, just be sure to spend according to your household size.
If you've made it this far, you are probably acquainted with the pitfalls and roadblocks that materialize out of nowhere (and if not, you've heard those horror stories). That doesn't mean you need to invest in a bomb shelter, but it does mean that you need to have a backup plan in the event of an emergency. I don't have a landline, it's unnecessary because A: I wouldn't ever use it, and B: I have a cell phone. So I invested in a cheap spare and phone card. Why? I won't get into the story associated, but it's easier to be safe than sorry.
This is the purpose of having a savings account. You won't be able to anticipate car repairs or doctor bills, so make sure to have money set aside for those occasions. Even if you're just putting $5 into that account every other week. To avoid the temptation of “dipping” into that account, you may set up certain limits with your bank or credit union, such as, prohibiting atm withdrawals from that account.
As you keep track of what you're spending, saving, and earning you'll start to develop better budgeting habits and be prepared for the road ahead!