Why Do I Need a College Budget?
Unless you or your parents are unbelievably wealthy and don’t worry about you spending frivolously, you should have a college budget. A good budget can help you accomplish your short and long term financial goals. For instance, your short term goals might include going on spring break this year, paying off your student credit card, or helping your parents more with your school expenses. An example of long term financial goals might include saving up for a study abroad trip, purchasing a car or paying your tuition without student loans.
How to Create a College Budget
The first step to college budgeting is to identify where your money is being spent by drafting a monthly budget. Use our Monthly Budget Calculator to help you remember all of your current income sources and expenses.
Student Budgeting Works
Student budgeting is more than merely listing out your current bills. You want to use the results of your college budget to help you make good financial decisions. In addition to your college budget, create a list of your short and long-term financial goals. You want to turn your current college budget into a plan that will help you reach your financial goals. That might include:
- Reducing spending on miscellaneous expenses such as pizza, eating out, movies, etc.
- Carpooling to save gas money.
- Putting a set amount of money away every month for your trip, car, or emergency fund.
- Making payments above the minimum amount on your debt (like student credit cards or your car payment).
- Increasing your income with part-time work (see our section on student jobs).
Once you complete your college budget, you might find that your expenses are too high. If you are spending more than you make every month and going into debt, you need to change your ways quickly. Credit card debt isn’t ok just because your monthly payment is only $25. Your debt is only going to grow unless you start paying off the principal balance. Student budgeting isn’t easy – there are plenty of spending temptations in college. Understanding your financial picture and taking control of your finances is your responsibility. Just think, once you stick to your college budget you can accomplish your financial goals!