Joining college offers a thrilling experience for many students but could also be challenging due to the financial difficulties one may endure. In addition, in most cases, many students entering college experience life without their parent’s or guardians’ warmth and safety for the very first time.
It might be scary to imagine that they will manage their affairs independently and make crucial decisions without the approval of their seniors. However, one significant area that affects almost all college students is learning personal financial management and budgeting.
Creating a budget is crucial in helping students navigate challenging college life and honor their financial obligations on time. Writing a workable budget will help you understand your saving and spending habits, preparing you to achieve bigger goals such as paying your student loan, saving for holidays, or moving to a new environment after college.
Once you draft a budget, you will only make adjustments as your income changes. It will help you achieve numerous goals throughout your college life and beyond. Since budgeting is a skill, you must learn how to make and follow your budget.
Here Are The Six Steps In Creating A Budget
1. Compute your income: This is the net income that gets into your checking account, assuming you are on a regular payment from your employer. Compute the value accurately to avoid overspending.
2. Write down your monthly expenses: These could include college supplies such as books, transport, subscriptions, dining, etc. Also, include savings, although we can’t classify them as expenses.
3. Classify your expenses into variable and fixed: Fixed expenses are those you can’t avoid, such as rent and college supplies. Variable costs include entertainment, travel, and membership to gyms.
4. Establish the cost for each of the identified expenses: Check your bank statements to determine the cost of each expense identified. Fixed expenses tend to be the same for each month. Determine the average costs of variable expenses.
5. Adjustments: Check and compare your monthly income and expenses to determine whether the money coming in every month is enough to cover all the costs.
6. Review the budget: You should keep reviewing your budget to capture the prevailing conditions. For instance, your income may increase, or your expenses decrease. You must capture the changes to ensure your budget reflects your finances.
Saving Money As A College Student: Here Are 10 Tips For People With A Student Loan
1. Avoid Paying Full Price For Textbooks:
One of the main cost items that could impact your finances is textbooks. Try purchasing old ones from students, renting, or using digital copies. You may find free pdf uploaded online for older editions.
2. Explore Prior Learning Assessments:
This option is appropriate for adult students enrolling back into college. Such students have hands-on experience obtained from their working life. Prior learning assessments are programs that give you credit for college-level skills you already have. It will reduce your classes, helping you to save substantially.
3. Learn Online:
Learning online is an option that would help you avoid on-campus expenses—for instance, transport and rent. Besides, you will be able to continue working full-time or part-time, maintaining your income.
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4. Watch Your Use Of Credit Cards:
Avoid using your credit card even for essential expenses such as tuition fees. Education loans from credit cards may be difficult to manage, especially with the compounding interest. Seek an alternative such as grants, scholarships, or other financial options before committing to credit cards to clear your college expenses.
5. Use A Budget:
Sticking by your budget will help you manage your spending, helping you to save substantially. Controlling your expenditure will help you get out of money debt and plan for future goals.
6. Share Expenses With A Roommate:
Sharing your costs with a roommate is another excellent way to save money. Rent a house with several rooms and split rent expenses with your roommate. You may also pool finances together to purchase furniture, electronics, and laundry.
7. Determine What Is Essential And Non-Essential:
Differentiate between crucial items that you can’t stay without and non-essential items. Focus on the essential things until you learn to live within your means. Avoid spending substantial amounts on items that are not a must-have.
8. Watch Out For Impulse Spending:
When you have money, purchasing items you want but do not need is easy. For instance, you may buy the sixth pair of Nike sneakers or a new iPhone. Impulse spending is occasioned mainly by peer pressure. I would advise you to set aside some discretionary spending to avoid using your money on items you don’t need.
9. Cook Your Food:
If you are not on a meal plan (which is another great idea), just cook your meals! Eating in restaurants can be expensive and deplete your financial resources faster than you think. However, if you have the chance to get a meal plan, it is even better. Besides saving time, you can take your meals any time you want without going to the grocery store!
10. Use The School Gym To Work Out:
Instead of paying for gym subscriptions, use the campus facilities for workouts. Gym subscriptions are costly and drain your finances. Use the school gymnasium and put the money in savings. You will be surprised by how much you save in several months.