Jan. 26, 2021
You may have noticed, but college can be fairly expensive (that's why we so frequently discuss financial aid secrets). Tuition aside, many of these costs are similar to the ones you're going to face after you graduate, so it's critical that you start learning how to manage your money while you're still enrolled. Master these six tips for budgeting your undergrad expenses and you'll be able to do more of the other things you want to do at college.
Your most basic goal when making a budget is to spend less than you earn. Begin by confirming all of your income sources, including things like work, grants, scholarships or loans: You want to make sure everything is still being distributed to you on schedule. Then look at everything that you've been spending over the last several months. Break down your expenditures into categories that make sense to you (like "food," "transportation" and "entertainment") so you get a sense of how much you're spending each month. If you're spending more than you earn, look at your least critical categories and where your habits need to change to match your income.
Budgeting is a bit like blackjack — you have a certain value that you don't want to go over. The closer you get to that value, the more careful you have to be about how you play your cards, lest you bust. The cards, in this case, are your fixed costs — things like room and board but also transportation, laundry and textbooks. Pick a system that you feel comfortable with, whether it's a spreadsheet, computer program or phone app, and be methodical about tracking and reflecting on how you're spending your money each month. (If your college offers a course on personal finance, you might consider taking it.)
One of the many perks of having a student ID and a college-affiliated email address is the ability to take advantage of special pricing. From clothing to groceries and even student nights at restaurants, you'll notice that plenty of businesses offer a concession to students. Use them! And if you're unsure whether there's a student discount available, just ask.
Being able to set money aside for the future is a great skill to have, and there's no reason not to start doing so while in college. Give yourself a specific goal that's at least six months out — concert tickets, a vacation — and figure out how much money you'd have to set aside each month in order to have enough saved up by the end. If you don't have a savings account yet, do some research or ask around about banking options.
It's easy to see when you're running low on cash if you go from having several bills in your wallet to none. That's definitely not the case when swiping your debit or credit card. To avoid hefty overdraft fees and crippling credit card debt, keep track of your available funds and spend accordingly. If you're using a credit card, make sure you pay your bills in full and on time. If you need to temporarily keep a balance on your credit card, that's fine — but make sure you now account for the interest payments in your budgeting. You and your credit score will be happier in the long run.
Sometimes the numbers just don't line up. You might find that some seasons tend to be more expensive: electricity bills going up during the summer because you're running the air conditioner, needing to get a bunch of books at the start of the semester, etc. You might also have unexpected expenses for a given month, like if you buy someone a present or need a new suit for a job opportunity. The months in which you are under budget can help you to prepare for these. But it's also possible that your financial needs simply change over time; moving off-campus, for example, might have different costs, as might purchasing a car. This is fine, and you can expect it to happen often across your college career! Just be honest about the changes, and if you realize you're going to start needing more money each month, look to find additional sources of income, or ways to trim other expenses.