Living on a budget is hard for anyone. But for college students, it may be the first time that you have been in full control (or almost full control) of your money. A few tips for how to handle your expenses, avoid debt and still have some fun along the way can be a big help. Whether you think you are doing just fine money-wise or if you have no idea where to begin, read on; while these are tips for college students, they’re suggestions that everyone can benefit from.
If you have never tried living on a budget before, you may have no idea where to start. Wells Fargo offers some tips in their online article, “Budgeting for college students.”
1. Track your spending. Before you can create a budget, you need to know and be honest about what you are spending. Write down or track all your expenses for a month in a spreadsheet to see where your dollars are going.
2. Make a list of expenses/income. Once you know what you are spending, make a list of the required expenses vs. how much income you have.
3. Do the math. Now comes the hard part: compare what you have to pay out with how much money you have coming in to see if you have enough to cover all your expenses, or if you need to make some cuts.
4. Make adjustments. A budget is a living document, so your expenses and income will change. Be prepared to go back and adjust your budget as these changes happen.
Wants vs. needs
Probably the hardest part of budgeting for anyone is determining what you need vs. what you want. Hitha Prabhakar tackles that topic in her blog post for U.S. News & World Report, “6 must-follow money tips for college students” from October 3, 2013.
Figuring out what is a want, like non-meal plan food, and what is a need, like gas to drive home to visit mom and dad, is something that you can probably determine during your month of tracking expenses. Another area for college students to be careful about when it comes to living on a budget is credit cards. It can be all too easy to whip out the plastic to cover any budget overages you may “want” when your funds are running low. While building your credit is a good idea, you don’t want to leave college saddled with extensive credit card debt you can’t afford.
Tips for keeping your budget on track
You’ve tracked your expenses, you’ve created a budget and you are still having trouble paying all your bills. Katherine Pilnick offered some advice in her post “A college student’s guide to creating a budget” for Student Universe on October 23, 2012. Her first suggestion? Use cash only. “That way, if you don’t have the cash to pay for something, you know it doesn’t fit your budget,” she wrote. Prabhakar also noted, “Some students give themselves a weekly cash allowance rather than carry a debit card, and when that week’s allowance is gone, they wait until next week for more ‘wants.’”
Another idea is to find a way to supplement your income. Pilnick advised college students to “Consider taking on a part-time job on campus such as tutoring or becoming a teaching assistant.” She suggested if you already have a job, but the pay isn’t great, you can either ask for a raise or start searching for another position that pays better.
Sure living on a budget can be a drag, but not having any money to pay your expenses is even worse. If you follow these tips and stick with your money plan, soon you will be used to your budget and it won’t seem so difficult.
Do you have a budget? How do you stick to it? Let us know your money handling tips and tricks in the comments below.