Budgeting in College

Creating and sticking to a budget in college is an important step. A budget is a written plan that outlines how much you will spend each month. It can make sure you have enough money every month, and that you do not run out before your next paycheck. A budget allows you to keep track of how much money you are making, and how you are spending it.

With a budget, you may be able to see that you are able to spend less money on certain things, leaving more money for others. Because of this, a budget is key if you want to save money. Saving money may be helpful for emergencies, expensive purchases such as cars, apartments/homes or school, and other life events.

So, how can you start budgeting now?

Gathering Bills and Pay Stubs

First, think about all of the different ways you spend your money, even besides bills. This could include regular purchases of coffee, food, or other items that become an expense you may want to write down.

After you have gathered together all of your bills, pay stubs, and other expenses, write them down. (Note: an expense is money you spend!) Then, write down how much money you make. (This is your income!) Next, subtract your expenses from how much money you make.

What if I Don’t Get Paid Every Month?

If you are not paid every month, but you expect things to be as they were last year, add all the money you earned last year and divide that number by 12. This is about how much money you will have each month.

Making a Budget

First, you may want to separate your expenses into different categories. These categories can include bills, (rent, utilities, car insurance, etc), food, gas, entertainment, clothes, school supplies, tuition, loans, money for family, unplanned (car repairs, medical), and credit card bills. It is important to note that your bills might change every month. In order to keep track of this, you may want to look at what you paid for the same month last year.

When you subtract your expenses from your total income, you will be able to see how much you are spending in relation to how much you are making. You want this number to be above zero: if the number is less than zero, you are spending more than you make, and if it is zero, you do not have any left over. You may want to look at your budget to determine what you do or do not need to keep spending money on, in order to get this number high enough for you.

Decide how much money you want to put into savings. Section off your savings into the different places it will or may need to go to to help come up with this number. Understanding how much you want to be putting into savings is vital when coming up with your budget.

When it comes to formatting, Google Sheets can be a good place to create a budget. Mint is a free smartphone app for making budgets. Other apps include Goodbudget and Empower, and a free desktop software is GnuCash. Check out this article for a complete list of budgeting tools!

Using Your Budget

When it comes to using your budget, you first want to make a plan for how you will spend your money that month. Write what you expect to earn and spend. Then, regularly write down what you actually spend. At the end of the month, check to see if you spent what you had planned. Use this information to guide your plan for next month’s budget.

Other Ways to Save Money

There are other ways you can save money. You may consider writing down everything you spend. After a certain period of time, you can look at these expenses, and decide what you want to keep buying.

Another way is to only pay with your credit card if you can pay the entire bill when it comes; otherwise, you will pay interest.

Pay your bills when they are due - this is the only way to avoid late fees and other costs. Setting up autopay on your credit cards is a great way to make sure that your payments are never late, but you have to be sure that your checking account has enough in it to cover the bill!

Keep the money you are saving separate from the money you spend. In order to do this, you may want to consider opening a savings account in a bank or credit union.

This also applies to cash: If you have cash at home, you will want to keep spending cash and cash you are saving separate. Additionally, keep all of your cash in a safe place.

If you enjoyed this article, you may be interested in 5 Easy Ways to Save Money in College.