We’ve never met a college student who wouldn’t benefit from learning how to make and stick to a budget. You should begin to understand these important budgeting tips for college students to build a strong foundation for:
- Managing your finances
- Controlling your spending
- Saving money
- Understanding how it all works together
The budget you establish as a college student will help you continue to practice fiscal responsibility after graduation and into the future.
Follow these six tips to get started now.
1. Determine Your “Take-Home” Pay
Many college students work part-time or intern to pay for everything from tuition costs to entertainment. You might also get the money you need from student loans, scholarships, grants, or loved ones. This is the amount of money you bring home each month, creating a foundation for your budget.
Look at your pay stubs. If your hours vary, look at your monthly pay stubs and average your net income. Your net income is the dollar amount that gets deposited into your checking account. You will list this dollar amount as “take-home pay for budgetary purposes.
If you’re a freelancer, determine what amount from each paycheck should go toward your taxes. That’s the dollar amount you put aside each month, and it doesn’t count as “take-home” pay.
2. List Every Monthly Expense
Some typical monthly expenses for college students include:
- Books, computer or laptop costs, and other supplies
- Tuition plan payments
- Meal plans
- Gym memberships
- Toiletries, cleaning supplies, and other household goods
- Cell phone bill
- Internet or cable
- Monthly streaming services
- Car payments and gas
- Public transportation
- Loan or credit card payments
- Insurance (health, rental, and auto)
- Utilities like electricity, gas, and water
3. Calculate Both Fixed and Variable Expenses
Fixed expenses are roughly the same each month. These include items such as:
- Insurance payments
- Streaming services
- Meal plan payments
- Your cell phone bill
Variable expenses can change from month to month, but that doesn’t necessarily mean they aren’t just as important. Common variable expenses include:
- Money spent on gas
- Entertainment costs like eating out or buying tickets
4. Determine What You Can Pay Each Month
Whether a particular expense is variable or fixed, you’ll have to determine its importance. Groceries can be expensive, but starving to death isn’t an option. On the other hand, you might not be able to go to every concert that comes to town. Sometimes making that choice isn’t fun, but it’s part of setting up a sustainable budget.
Work on your essential, fixed expenses. Put down your best estimates for your most important variable expenses. Look at how much you spent grocery shopping on recent trips. What’s the average? Can you cap how much you spend in that category each month?
Sticking to your budget in each category lets you know how much money you can put into savings each month, plus how much you can use for fun.
5. Make Adjustments as Needed
Take a look at the budget you’ve created. What needs to be adjusted?
If you find that more money is being spent than earned, this is a good time to determine where you can cut back. Can you switch to generic brands or clip coupons? Public transportation might be better for your budget than paying for gas, insurance, and a car payment. Running at a nearby track is less expensive than a gym membership.
Making the most of a tight budget might sound intimidating, but you’ll build invaluable skills for the future.
6. Stick to It
Our final budgeting tip for college students is the most important: Stick with it! It doesn’t do you any good to create a solid system and then ignore it. Financial discipline gets easier as you get older, especially if you start now. Budgeting also helps you create a more stable future.
Continue to Learn
As a college student, you get to learn something new every day. Continue the trend with Power Finance Texas. Our blog is full of great information to bolster your financial literacy, help you prepare for emergencies, and discover how to set aside funds for a rainy day.