Learning to build and stick to a budget is an essential skill and part of overall financial wellness. Students who budget worry less about money. Whether you are paying for school yourself, taking out loans, working while taking classes, receiving scholarships or allowances, budgeting is for you. Many banks and financial centers have websites and apps that can assist you with this process. If your’ bank does not, free apps like Moneystrands and Mint can be great resources.
You will have two types of expenses at college:
- Cell phone
- Eating out
How to Create and Stick to a Budget
Start by making a list of your known or anticipated expenses and categorize them as fixed or variable. Also list out your sources of income like scholarships, financial aid awards, or employment.
After you have made your lists, add up your total income and expenses to identify how much money you have to spend and allocate it for your fixed expenses. If your income exceeds expenses, then you can budget for some of your variable needs and savings. If your expenses exceed your income, you need to identify ways you can cut back on expenses (or increase your income if possible).
If cutting back is necessary, take a look at your past few weeks’ expenses to see if there are any “money sucks.” For example, if you are ordering a fancy coffee drink every day, consider switching to regular coffee, making your own coffee, or only buying it once a week as a treat. Also think about saving money by buying used textbooks, opting for free subscriptions or sharing subscriptions to streaming services with friends, or opting for a lower-cost cell phone or plan. If you are going out socially with friends, choose to do so less often and start hosting nights in. And if you are of legal drinking age for alcohol, try drinking one less drink when you go out or go out less often. All these small changes can add up.