Understanding How to Budget
Understanding How to Budget as a College Student
Welcome to college! This is an exciting time when you’ll explore ideas and possibilities that can change your life. This might be the first time you’re making money-management decisions on your own, too. If you’re footing the bill for your education, you probably already appreciate the demands on your time that will come from studying and working your way through college in California and anywhere beyond.
If you’re focused solely on studying right now, you probably know that your education could lead to $100K or more in debt, depending on scholarships you receive and the school you attend. That’s a hefty price tag for you and/or your family.
Now that we’re talking about advanced educational opportunities, it’s time for a crash course in budgeting for college students who haven’t taken any economics or personal finance courses.
Budgeting 101: What Does It Take?
- Figure out how much money you’re earning.
- Collect receipts and track how much money you spend.
- Analyze your expenses and determine what you can live without and where you can cut costs.
- Create a spending strategy and remain disciplined.
- If possible, set aside some extra money that you can use to celebrate when you reach a financial goal.
- Understand that financial stability is better in the long run than overspending to impress people today.
To that last point, you’re probably not immune to peer pressure. With so many students experiencing financial and personal freedom in college, you’ll find yourself in situations where your friends encourage you to buy something you can’t afford or spend money on a trip or event that can put you in a difficult financial situation. You need to handle yourself responsibly or be prepared to face the consequences.
For some Bay Area college students, financial responsibility is a shock to their system and they don’t understand its importance until they’ve racked up thousands of dollars in debt. Irresponsible behavior today can impede your ability to borrow money for a home, car or anything else later in life.
After you’ve created a budget for this semester, take a look at some of these money-saving tips and habits to see if you can work them into your life at college.
Tips for Saving Money in College
- Reduce tuition costs by securing grants and scholarships throughout your college career. Earn transferable college credits by taking courses at less-expensive community colleges.
- Learn how to cook, and invest in a slow cooker so you can make meals while you’re in class.
- Consider living with friends to defer room and board expenses.
- Scour the discount chain stores for less expensive school supplies. You also can find better deals if you buy in bulk, and then split the cost with your friends.
- Go online to find cheaper textbooks and look for opportunities to rent your books from your library.
- Look for free entertainment on or near campus and take advantage of any discounts that local businesses offer to college students.
- Consider joining groups that offer numerous socializing opportunities (such as alumni groups) because you’ll often enjoy some free food while you get to network.
- Look for fun, thrilling and résumé-building excursions and experiences offered by on-campus groups and clubs at a discount.
- Consider whether you truly need a vehicle on campus. If you can walk, bike, skateboard or take public transportation, you’ll save a bundle of money in vehicle maintenance, insurance and parking fees. Plus, you’ll reduce your carbon emissions.
You don’t have to be an economics major to figure out a responsible personal finance strategy. A college education requires significant investments on a number of levels. When it comes to your daily money management, don’t flunk the tests!