Money management is very important when going to college. Not only will creating a budget help you understand exactly where your money goes, but it can save you from making costly financial mistakes.
College can be one of the most expensive things to pay off. Thus, learning how to manage your finances can be a silver lining for later on. And if that’s something that you want to learn how to do, then this is the article for you.
In this article, we will talk about how to create a budget for college.
With all that said, let’s start.
Calculate Your Income
The first thing to do when creating a budget is to calculate your income. As a college student, chances are you won’t have any income. But some take both full-time and part-time jobs to help pay for it.
You’ve got students that successfully run businesses from the comfort of their college dorms. So regardless if you’re working full-time, part-time, or run a successful business, it’s important to calculate the monthly income.
If you’re not receiving any income, then there is no real way for you to create a budget.
Calculate Monthly Expenses
You won’t have that many expenses when in college, but those few that exist can cost a small fortune. We can start by looking at the monthly repayment rate of your student loan, monthly rent, food expenses, textbook expenses, etc.
In short, these are enough to put a serious financial strain on any student. But we cannot create a budget without them. So, list them. When creating your budget, make sure to set aside both income and expenses in different columns.
Once you do that, the next step is to do some organizing.
Organize Expenses Into Needs and Wants
To create a college budget, you need to figure out what expenses you can live with, and what you cannot. Chances are, you can live without your gym membership. But you won’t be able to cross off that monthly loan payment.
We do this so that we know exactly how much money we can save. Even if you have no intentions of saving, that extra money could come nicely when needing to cover renting costs, repay loans, etc.
If you’re having difficulties figuring out what constitutes a need and a want, then you’re already in hot waters.
Determine How Much You’re Spending Each Month
Now we come to the part of the budgeting where you determine just how much of your income goes into expenses. This is the part that leaves college students flabbergasted.
Adding up all the needs and wants can give you a number that you didn’t really expect to read. And if that number is greater than what you’re earning, then you’re bleeding money fast.
You need to put a stop to the bleeding otherwise you’ll end up in even more debt than you are currently in. But how? What can college students do to get out of debt?
We, you get a better job. If your current monthly income isn’t cutting it, then you’ll need to look for a better job. This is easier said than done as everyone wants a higher-paying job than what they’re currently on. Regardless, this is the most straightforward way to get out of debt.
Adapt To the New Changes
College is all about surviving. But part of survival is adapting. So if you’re struggling financially, then you need to start adapting to your situation.
After everything you’ve done, you have a pretty clear idea of how much money you’re spending. The budget that you are creating clearly lists the expenses and income and paints a definitive picture as to what you can and cannot do.
If you earn less than what you spend, then do something about it. If you’re earning more than what you’re spending, then look at finding ways to open the gap even more.
Most college students struggle financially due to social pressures and lifestyle needs. But college can put you in a lot of debt. So it might be smart to think early about your finances and the ways to improve them.
So with all that said, what’s next? Well, next is to follow the budget and don’t overspend. Sticking to a budget might be even more difficult than creating one. As various pressures arise, it can be very hard not to buy new shoes.
But you’ll need to avoid these pressures and stick to the budget that you worked so hard creating.