For many people, entering the world of college includes a lot of firsts. Many of these firsts will be new responsibilities you have to take on for the first time ever. “Adulting” should really begin when you’re in college. One of these aspects of adulting you will have to perform as a college student is forming and sticking to a budget. Doing so can save you a lot of trouble. Below are some strategies to use when creating a comprehensive college student budget.
Determine Your Monthly Income
Before you can make a budget, you need to know exactly how much income you will have to pay for things in your budget. As a college student, you may have multiple sources of income. If you have a part-time job, obviously the pay you receive is part of your income. If you are going out on your own for the first time, your parents may be granting you some kind of allowance for your expenses while at college. Alternatively, you may also be receiving income from things like scholarships, grants, or student loans. You can add all these income sources up to calculate your monthly net income. However, there may be certain restrictions on what you can spend these funds on. This may be the case with your scholarship money or even your allowance.
Determine Your Monthly Expenses
Second, to budget properly, you need to know what your monthly expenses will be as a college student. Try to think of every single expense you will have on a monthly basis and write it all down. This should include things like tuition, room and board, school supplies, transportation costs, food, insurance premiums, loan payments, utility bills, phone bills, internet bills, and even entertainment expenses. The list should be exhaustive. You may even want to include the amount you will set aside to save by placing it into a savings account. If you want your budget to work, try to think of every possible expense you could have. This can be hard since the cost of college has doubled since 2000.
Categorize Expenses as Either Fixed or Variable
After you have listed all of your monthly expenses, you can now begin categorizing them into one of two groups. The first category should be fixed expenses. This should include expenses that you will have to pay no matter what. For example, the cost of your textbooks would be one such expense. The second category will be for variable expenses. These are expenses for things you want but don’t necessarily need every month. For example, a gym membership may be something you want but don’t need since you could probably exercise in the facilities of your own university without paying a fee.
Look for Cost Effective Solutions for Fixed Expenses
In certain cases, you may be able to find ways to save on fixed expenses. For example, room and board may be a fixed expense. However, you may have plenty of options in regards to student housing that differ wildly in terms of rent. You may find that the best student apartments in Lubbock, TX, for example, are not as expensive as you thought they would be versus the cost of on-campus student housing at Texas Tech. Another example, as previously mentioned, is textbooks for your classes. However, you may be able to find some of these textbooks online for cheaper use than they would be in the university book store.
Consider Variable Expenses You Can Lower or Eliminate
The good thing about variable expenses is they are not necessary. If you need to make more room in your budget, many of them can either be lowered or eliminated. This would be true, for example, of your entertainment expenses for the month. While you could go to the movies or buy new video games, you could instead use your brother’s Netflix account and borrow some games from friends that you haven’t played before. Once you have made these considerations, you can start drafting your final budget.
Your final budget should include all of your income and all of your expenses. While it may be harder to change your income, your expenses can certainly be changed. Certain fixed expenses can be lowered in certain cases. The same is true of variable expenses. They can also be eliminated outright. With this information, do the calculations for your monthly budget. If you aren’t coming out ahead in regards to what is left over from your income, make more changes until you do.
