5 Ways to Prep Your College Budget
1. Jot Down Your Expenses
Make a list of all your expenses, such as tuition, fees, books, room and board, groceries and personal items. If you're taking your car to school, you'll need to factor in gas and parking fees as well. The little things can add up quickly, so don't leave anything out.
When tracking your expenses for the school year, it might help to create two separate lists. The first includes expenses paid for through financial aid and student loans. Your college receives this money and applies it toward tuition, fees and room and board. Any remaining money is paid to you and can go toward other education-related expenses.
The second list is made up of expenses you'll need to pay for with funds from your personal savings account, cash from your folks or money earned from work-study or a part-time job. Expenses such as dining out, personal items, clothes and entertainment would go under this list.
This two-list system will help you keep track of all your expenses and where the money to pay for each expense will be coming from.
2. Create a Budget for Extra Expenses
Besides your recurring expenses, you'll also want to budget for those one-time costs. These can include anything from school supplies, bedding or plane tickets to fly home. Make a note on your calendar when you'll have to pay for these items. For instance, you'll probably buy items for your dorm room in late summer, while you may purchase a plane ticket in October to go home for the holidays.
You'll also want to factor in unexpected college expenses that can creep up, such as for computer software, medical expenses and fixing your car. Being blindsided by surprise expenses could really throw your budget off, so you'll want to add some padding for emergencies.
3. Figure Out Your Funds Situation
It's mission critical to find out when your funds from student loans and other financial aid will come in, and how they'll be disbursed. Your school normally receives these funds, and uses them to pay first for your tuition, fees and room and board. Keep in mind that private loans may have a different disbursement schedule than your financial aid, so be sure to check with your servicer.
If your parents or relatives have money saved in a 529 Plan, talk to them about how they will disburse the money and figure out what will work best for you both. For scholarships, make sure the check will be sent directly to the school, and that the "made payable to" information is correct. Most schools don't accept scholarship checks made payable to the student, so this section usually includes the name of the school. If you're not sure, check with the school bursar.
To help you keep track of these moving parts, include in your list the different sources of funding, how much you'll get from each type and when you can expect to receive them.
4. Factor in Your Income
While it's tempting to splurge on fun purchases and outings, don't squander away all the hard-earned cash you're making from your part-time job. Tally up all of the income you'll be receiving, and figure out how much you'll want to sock away for the school year. If you save some of your earnings to supplement your budget, it may give you the freedom to work less when school starts. In turn, you'll have more time to dedicate to academics, to pursue internships or join a campus organization.
If you plan to work during the school year, estimate roughly how much you can expect to make each month. Are you getting a work-study award for the upcoming school year? Figure out how you'll be spending that money, and whether it's for groceries, gas or something else.
You may receive "bonus" money that comes your way through cash gifts for your birthday or holidays. You can either use that extra cash toward school-related expenses, or save it as cushion money for the future.
5. Ask for Help
If you're stuck on something, don't be afraid to ask for some help. Reach out to someone you trust who knows a thing or two about budgeting in college, such as a parent, family friend, relative, school counselor or older sibling who has been to college. They can help you figure out how to best create a budget and talk you through any worries you have about tackling your own money matters for school.
Taking the time now to create a college student budget for the school year will help you be in a better position to make your money last the whole year. Plus, it'll ward off the stress and headache of figuring things out as you go.