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College is a time for learning and personal growth, and gaining control of finances is one of the tools students will need to learn as they start living more independently. According to the College Board, the average cost of room and board for the 2016-17 school year was $10,440 at four-year public schools to $11,890 at private schools. Balancing these costs with living and entertainment expenses presents a unique challenge for students living on their own for the first time.
Learning how to create a budget is essential for keeping track of the myriad expenses and sources of income that one can have during school. These simple tips can help you build the right college student budget that makes room for both fun and financial responsibility.
Carefully Track How Much You’re Spending
To begin creating your college student budget, have an idea of how much money you’re regularly spending, and what you’re spending it on. To get an accurate picture of your spending habits, you can track your spending for a prolonged period of time—say a month or more. Enter your daily expenses into a spreadsheet, or use an app like your bank’s mobile banking app, Mint or Wally, to help collect your spending info all in one place. With this information available, you can work to create a realistic budget that encompasses your actual spending habits instead of using guesswork.
Break It Down
Next, make a list of all of your sources of income in a given month. For a college student budget, this can actually be a little more difficult than it sounds. Be sure to include your average earnings from your job and/or work-study, money from parents or relatives, financial aid, and scholarships. Then categorize your regular expenses, separating them into buckets for things like housing, education costs, food, transportation, and entertainment.
Create your budget by deducting your essential costs first—housing, food, tuition, etc. Look at what money may be left over each month to plan your entertainment budget. While it’s important to include some funds to enjoy evenings out with friends, don’t forget to incorporate monthly savings into your budget. By putting aside extra money each month, you can prepare for any unexpected expenses that come up in the future.
Stick to It
Once you have your budget in place, it’s up to you to keep to it as best you can. Using financial apps like the ones mentioned above can help you keep your spending in check with regular updates and reminders about your progress. Of course, every month is different and your needs will change over time. To help make sure you maintain a realistic reflection of your spending habits and a helpful tool in your pursuit of financial responsibility, take time at the end of each month to revisit your college student budget. Use this time to identify opportunities for saving, account for changes in income, and to continue developing your financial fitness skills.
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