College can be costly especially when you are not in a scholarship program. It means you have to pay tuition, as well as covering for foods, housing, transport, and books expenses. It can be overwhelming for those who just enter into college world and presented by so many expenses to manage. However, you can learn how to create your own college student budget now.
Manage your money as college student
There are many important factors that affect your current financial situation as well as future finances. Budgeting your college expense is necessary because the amount of debt students have to pay for college can take years to pay off. It is time to learn how to be financially literate with these useful tips for college budgeting:
Break down your total income
Total income includes any money you arrive at school with. It can be money from your family, combined with financial aids, money you earn from work, and so on. Your school’s financial aid office will give you a refund if you accepted more loans, grants, or scholarship than you needed to cover tuition, room, board, and facilities fees. The refund is in the form of a check or direct deposit. Save refund you receive or use it for other college essentials such as books, and other education-related expenses.
Assess your financial situation
It is essential to asses your financial situation and categorize the expenses. This way, you will be able to review your spending and earning over the past month in detailed. Create a list of your spending so you know the average cost of each item. You can categorize them by tagging each item as ‘want’ or ‘necessity’.
Get the final number
After making a list of your spending and your total income, crunch the numbers by adding all your expenses together. Then, subtract the number from your total monthly income. If the number is positive, you have extra money you can use or save for emergency funds. If your final number is negative, you may need to cut down ‘unnecessary expenses’ such as cutting down some of the lists on ‘want’ category.
Why budgeting is necessary
One of the biggest causes of stress during college is not only the schoolwork but also the expense. There are many ways you can do to earn more income such as by taking part-time job. However, budgeting is just as important because no matter how much you earn each month, it will go to waste if you cannot manage it well. By budgeting, you know exactly where your money goes. You can also make necessary adjustment to make everything fit into your budget.
College budgeting to avoid unbearable debt in the future
Another reason why college budgeting important is because there is a risk of having too much debt after finishing your college. It may take years to pay off all debt. It can become a hindrance for your personal growth and professional opportunities. Budgeting can help lower the risk of future financial strain.