A budget is a system that tracks what money comes in and what money goes out.
It can keep you from getting in the red and spending more cash than you have available.
That mini-fridge isnt going to restock itself.
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Starting a budget isnt something to delay until you graduate and begin your first full-time, professional gig.
Can You Survive 10 Days of Budgeting?
If you gotta wrangle your budget, it may be time to consider a savings challenge.
Budgeting for College Students: Where to Begin
Budgeting involves tracking your income and expenses.
Lets focus on the income first.
Part of the trade off of a college education is sacrificing a few income-earning years to earn a degree.
This means many students have limited money coming in.
Still, youve got to work with what youve got.
Its important to take into account how often you get paid from these various sources.
Youll want to make that money last.
Add up how much you earn from the paychecks you get each month.
During lean months where you bring in less, you might pull from your sinking fund to cover expenses.
Not all parents are able to (or choose to) financially support their college-aged children.
Remember to include what you plan to add to your savings.
Spending Categories for College Students
Begin by brainstorming all your relevant spending and savings categories.
Your expenditures could include:
Drowning in Expenses?
Maybe youre scrambling after your car broke down.
Or you got a medical bill you werent expecting.
Or inflation has finally pushed your budget over the edge.
You dont need to go it alone.
When money is tight,these resourcescan help you manage unexpected expenses without stress.
However, if youre brand new to school, you probably have no clue what youre likely to spend.
Check with your colleges financial aid office for information about estimated costs.
According to Apartment List,the national median cost of rentin June 2024 was $1,411a month.
If youre up for sharing with a roommate, youll be looking at $705 per month.
You also gotta eat.
Below are three popular approaches.
In other words, your budget should balance out to $0 at the end of the month.
That doesnt mean you should probably spend every dollar you get your hands on.
With a zero-based budget, you just want to have a plan for every dollar.
Percentage-Based Budgeting
U.S.
This method is a prime example of percentage-based budgeting.
As a college student, you might want to tweak the ratios a bit.
A percentage-based budget makes sure you cover the necessary basics without sacrificing saving and having some fun.
Heres how this system works:
Determine spending limits for your variable expenses, like food and entertainment.
(Pay fixed costs, like rent or your phone bill, the way you normally would.
Dont include those expenses in this system.)
Stuff cash in labeled envelopes to match those spending limits.
Only use the cash envelopes when youre out shopping.
Once an envelope is empty, no more spending in that category until its time to replenish the envelopes.
Alternatively, you could use gift cards in place of cash envelopes.
Then youd just use that card for all your grocery shopping for the month.
Just confirm you dont have to pay a service fee to purchase or maintain the gift card.
Youll also want to know if your card expires.
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There may be a lot of trial and error in your first couple of months.
Here are some tips for going from Budgeting 101 to doctorate-level smarts.
Be Flexible
A budget guides your financial life, but dont treat it as if its set in stone.
Every students budget is bound to change.
Factor saving into your budget.
Even a small amount each month is better than nothing.
Embrace Budgeting Tools
Afraid youll flub your budget?
There are various tools to help.
If youre a fan of spreadsheets, you’re able to accessbudgeting spreadsheetsonline for free from sites likeSpreadsheet123orSmartsheet.
Microsoft Excel also has budgeting templates specifically for college students.
If youd rather track your money with an app, some ofour favorite budgeting appsincludeCleoandQuicken Simplifi.
Treat Credit Cards Responsibly
Even credit cards can be part of budgeting for college students.
Still, you may have considered opening a credit card account if you dont have one already.
Having a credit card in college can be a positive thing if youre responsible about your spending.
This will help you establish apositive credit score.
One component of your credit score is the length of your credit history.
You brew coffee at home, you dont walk into Target and you refuse to order avocado toast.
(Can you sense my millennial sarcasm there?)
