Experienced a pay cut? Here’s what to do next:
- Discuss a plan with family members
- Adjust your budget or create a new one
- Trim non-essential expenses
College is supposed to be the time of your life, but it can also be a time of financial stress. Tuition is expensive, the cost of textbooks can add up and the one thing that’s not a mystery about the mystery meat in a residence dining hall is that it costs a pretty penny.
A packed schedule with schoolwork, extracurricular activities and a part-time job (oh, and a social life) can mean little time to track every dollar that leaves your wallet. That’s a recipe for accidentally overspending. Learning budgeting basics is the key to avoid running out of money before the end of the term and having to subsist on ramen noodles.
Travis Sevilla, who graduated from San Diego State University in 2016, found that learning how to budget in college helped him stay on top of his finances as a student.
“Budgeting was important for me because I wanted to become more independent and not rely on constantly asking my parents for money,” he says. “I also knew I wasn’t going to be in college forever and that I’d have to learn how to manage my finances.”
Here are some budgeting tips for college students to help you excel at managing your money while in college:
Freshman year is exciting. For some students, it’s the first time in their lives they can buy and do whatever they want. But many quickly realize that groceries, not to mention meals out at the popular campus burger joint, can add up—and spending frivolously has consequences.
Alex Haslam, who graduated in May 2017 from the University of Utah in Salt Lake City, saw many of her friends struggle with how to budget in college.
“A lot of students try to replicate the standard of living they’re used to when they were living with their parents, while building their ideal social lives,” she says, “even though they don’t necessarily have the funds to do so.”
It’s easy enough to buy specialty coffees at your favorite cafe before hitting your morning classes or to dine out before evening study sessions if you’re used to your parents picking up the tab. Buying new clothes or the latest tech gadgets (without thinking of what that means for next week’s groceries) could also be tempting. But it’s important that students adjust their standards to reflect their new financial situation. Managing your money while in college may mean cutting back on nice-to-have’s and focusing on the essentials to avoid lean times later in the school year or calls home to parents for more money.
Once you’ve completed your college reality check, the next way to focus on managing your money while in college is to take an honest look at your income. Consider the funds you are bringing in from any scholarships, jobs and internships, as well as allowances you may be getting from parents or relatives. Then, track how you’re spending this cash.
“Finding that balance between living the life you want and living within your means is an important part of growing up,” Haslam says, “and facing reality makes it easier to accomplish.”
Managing your money while in college can be made easier with financial apps and software that help you track your income and spending. There’s accounting software like Quicken® or Microsoft® Money and countless apps like Mint or You Need a Budget. When searching for the best app to help you manage your money, you’ll want to consider which features are most important to you. You can, of course, always go low-tech and budget with pen and paper if that’s more your style.
“Each of my friends figured out a different way to budget that helped them,” says Haslam, who is now a marketing specialist for a digital marketing company. “It turned the scary reality of being a poor college student who couldn’t afford things you want and need into something more manageable.”
To solidify your budget, average the amount you’ll bring in from all of your income sources over the length of the quarter or semester. That’s your spending cap. Then look at what you’ll likely need to spend on categories like food, entertainment, school expenses and travel home, making sure to put some money aside for emergencies. If what you need to spend exceeds your cap, you’ll need to find simple ways to save money or opportunities to earn more.
Budgeting doesn’t mean you can’t have fun. The most important budgeting tips for college students are about having fun within your means.
“The key is to know when you should spend your money and when you shouldn’t,” says Taylor Chastain, who graduated in May 2017 from the University of Florida in Gainesville. “There are so many free events and activities happening around college campuses on any given day.”
Chastain, who now works as a marketing manager at a tech company, also recommends looking for clubs and restaurants that offer discounts for students to help with managing your money while in college.
“Finding that balance between living the life you want and living within your means is an important part of growing up, and facing reality makes it easier to accomplish.”
Sevilla, who graduated with a degree in business management and now works in marketing at a startup, says he socialized happily, and lived frugally, by staying in rather than going out.
“Getting your friends together at someone’s place is a solid way to have fun on a budget,” he says. “Stock up on food and drinks at the grocery store and throw on some music for a truly college-like night that will be budget-friendly.”
Haslam, meanwhile, says a budgeting tip for college students is to prioritize spending on events and activities that will be memorable.
“Moderation is key,” she says. “I would ask myself if something was a once-in-a-lifetime experience. If so, I was willing to spend a little more. It’s okay to say yes to fun things, as long as you’re not saying yes to all of the fun things.”
The trick to how to budget in college isn’t to sacrifice the things you love, but to find cost-effective alternatives.
Chastain, for example, gave up his coffee house habit and started brewing coffee at home. Haslam subscribed to streaming services to replace cable.
“I tried to see if there’s a way to cut down without having to completely cut the things you love out of your life,” Haslam says.
One budgeting tip for college students to slash costs without sacrificing what you need is buying in bulk, as Sevilla did.
“It’s almost always better for your wallet,” he says. “Having more rolls of toilet paper on hand also means fewer trips to the store, which leads to savings in gas and time as well.” You can even go in on bulk purchases with your roommates or friends.
No matter how you succeed in managing your money while in college, you may slip up from time to time. The most important lesson to learn about budgeting is that you might have to scrimp after you splurge.
When Chastain went over his budget, he went on the peanut butter and jelly diet to get back on track.
“Once I realized I was going over my budget, the first thing that went down as a result was my grocery budget,” he says. “I didn’t particularly enjoy eating peanut butter and jelly sandwiches every day as a result, so that motivated me to get back on my budget the following week.”
“The key is to know when you should spend your money and when you shouldn’t. There are so many free events and activities happening around college campuses on any given day.”
All of the budgeting tips for college students won’t help if you don’t embrace the value of budgeting. Creating a budget might not seem like the most riveting way to spend an evening, but you’ll appreciate it when you still have cash to spare at the end of the term. The best part of budgeting for Haslam was that it reduced her stress.
“Being a college student can be an intensely stressful experience, with working part time, studying constantly, going to class day in and out and managing social drama,” she says. “Taking care of your finances and having one less thing to be stressed about is one of the best things a student can do.”
Learning how to budget in college will also prepare you for post-college life, when you may need to account for new expenses and financial goals, such as paying off student loans and saving for big purchases.
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