How to Make a Student Budget...And Stick To It!
Making a budget can seem like a foreign concept to many college students. However, it is an essential part of growing up. Here are some ways for you to make a budget and stick to it.
As you leave your parents' nest, you'll find that all of your needs are not taken care of anymore. You must now buy your own clothes, pay for your groceries and splurge on your daily coffee. While some despise the idea of needing money-management techniques, it's an essential part of life - and one that you need to stick to!
Like many adults, students are on a fixed income. Whether you receive a stipend from a scholarship or get a bi-weekly work-study check, your money must last you until your next payday. A budget is the solution to your money woes. When you've got one, you won't need to ask your dorm-mate if those expired Ramen packages in the trash are fair game. The following steps can help you create and stick to the dreaded b-word.
While the idea of a budget puts a pit in most people's stomach, it doesn't need to be as hard as some make it. The first step to creating a budget is to commit to it. If you haven't promised yourself that you'd like to manage your finances, you'll never follow through.
2. Create a Worksheet
Seeing how your money is split between expenses is one of the best ways to stick to a budget. Make a budgeting worksheet that clearly states how much you make, your expected costs and a miscellaneous row for unexpected expenses. Many of these forms are available online to download, but you can just as easily create one that reflects your personal costs. Some of the items you should include in yours are:
- School supplies
- Car insurance
- Gifts (you can't forget your best friend's birthday or Father's Day!)
- Personal (this is where shampoo, deodorant, etc. fall)
Of course, if you decide to live off-campus, you'll need to add a whole new group of items, like rent and utilities.
3. Fill It Out
Once you've got your worksheet set up to your specifications, fill it out for the month. If you're unsure of how much you spend, estimate for the first month. You can also check with national averages of what most people spend monthly for rent, gas and other utilities.
4. Keep Track of Spending
As the month goes by, write down every penny you spend. Yeah, it'll be hard - especially when you're running from the coffee shop to class in the morning. But without tracking your spending you'll find that money is slipping through the cracks and you weren't even aware of it.
For example, if you buy a coffee three times a week at $3.19 a cup, you may round the price in your head. So, in your coffee column you put $36, figuring that covers the cost for a month. The extra change may seem minor to you, but after you tally the real cost, you've actually spent $38.28 - an extra $2.28 that wasn't allotted in your budget. If you do this across the board, you'll find that your wallet was thinning out with good reason.
5. Cut Back and Add on
Now that you have a better idea of how you're spending your money, you can adjust your figures for month two. If you found that you don't eat as much food in your room as you originally thought, cut back on groceries and put it towards something that needs it (like the coffee) or in a new savings account.
Of course, you'll also want to decide where expenses can be cut. If you find you're having trouble paying bills, but you have nearly 20% of your income going to entertainment, you may need to find cheaper ways to have fun. This is the important part of a budget, and often the hardest. But if you're strict with yourself, you'll find it gets easier after only a couple of months.
Now that you're ready to start saving, find out how Twitter can save you money!