Heading off to college is an exciting time filled with new experiences, but it also comes with a lot of financial responsibility. Unfortunately, many students enter this new phase of life feeling like they are lacking the education they need to navigate the world of adult finances. Here at Upbeat Financial, we envision a world where everyone has access to the tools and education they need to feel confident about managing their finances at every stage of life. So, in accordance with that vision, here are some practical budgeting tips to help new college students navigate the financial challenges of college life.
Creating a Realistic Budget
The first step to managing your finances is evaluating your financial needs, and creating a comprehensive budget. Start by listing all your sources of income, such as financial aid, scholarships, part- time job earnings, or contributions from family. Next, outline your expected expenses, including tuition, rent, groceries, textbooks, transportation, and entertainment. Remember, not all expenses are created equal. Be sure to prioritize essential costs like tuition, rent, utilities, and groceries before allocating money to fun spending like dining out, entertainment, or shopping. This way, you’ll cover your necessities first and avoid overspending on non-essentials. Thanks to the wonderful world of technology, you can find many user-friendly apps to help you outline and track your budget in a way that works for you!
Expanding on the above, we all know that textbooks can be a big financial burden for students. Luckily, though, there are ways to cut costs. Look for used textbooks, rent them, or explore digital versions, which are often cheaper. You can also check online platforms like Chegg, Amazon, or campus bookstores for deals. You can also get more creative with your textbook hunting, such as checking if your library has copies that you can borrow or even sharing costs with a classmate.
Maintaining Your Budget
Ok, so you have a budget. Now what? We all know how easy it is to overspend, falling victim to temptation on a day out with friends or not realizing the extent of the climbing costs when grocery shopping on an empty stomach. As a student, however, you may have access to student discounts. Step one is to take advantage of these whenever possible! Always carry your student ID and ask about discounts wherever you shop. You can also use apps like UNiDAYS and Student Beans to access exclusive deals. Also be sure to take advantage of free or discounted services offered by your college, such as gym memberships, software, and public transportation.
Paying attention to your dining habits will also help you stay on-budget. Eating out - even at cheap fast food places - can add up. If you have a student meal plan, take full advantage of it so as to not waste the money you have put into it, and to save yourself extra grocery costs. If you are on your own for food, opt to plan your meals and cook at home. Be sure to prepare a shopping list before heading to the grocery store and stick to it to avoid impulse purchases. To further reduce costs, explore options of buying in bulk for non-perishable items.
Beware of Unnecessary Debt
As young adults, another exciting step in your financial life may be getting a credit card. While credit cards can be convenient, they also come with the risk of accumulating debt. If you use a credit card, try to pay off the balance in full each month to avoid interest charges. Only use credit for planned expenses that you can afford to pay off quickly. For daily expenses, consider using a debit card to help stay within your budget and avoid overspending.
When it comes to university, credit cards are not the only sneaky source of debt that students face. Student loans are often necessary to cover education costs, but try to avoid taking on more debt than you need. Take the time to thoroughly understand the terms of any loans you take out and prioritize paying them off once you graduate. If possible, look for scholarships, grants, and work-study programs to minimize borrowing. Always review your financial aid package carefully and decline any unnecessary loans.
Build an Emergency Fund
Now that we’ve talked about budgeting for spending, it is important to note budgeting for saving. Of course we recognize that college is a very dynamic time of a person’s life, and not everyone is in the position to put money away consistently. That being said, whenever possible it is a great idea that can come in handy in unforeseen situations, or help set you up for the future. The reality is that unexpected expenses can pop up at any time, from car repairs to medical bills. Building an emergency fund can help you feel secure in handling unexpected emergency expenses without derailing your budget. To start saving, set up a separate savings account and at the end of each month (or whenever you have extra money available) move the extra money into the savings account for future use. If you have a steady income and budget, then you can even set up automatic transfers to the savings account each month to gradually build your emergency/future fund.
Plan for Social Activities
Ok, so we’ve given you the typical rundown of ‘responsible adult stuff,’ but we know that college is about more than just academics. Social activities are an important part of the experience! However, as we’ve noted, it’s easy to overspend on nights out, events, and other activities. A good way to find a happy balance of budget and fun is to plan your social budget in advance, and to look for low-cost or free activities on campus or otherwise whenever possible. Explore the area around your school for affordable entertainment options. With some planning, having a fully rounded and socially active university life while still sticking to your budget is absolutely possible!
Starting college is a major life transition, and learning to manage your finances effectively is a crucial part of the journey. By creating a budget, prioritizing your spending, and being mindful of your financial choices, you can enjoy your college experience without the stress of financial worries. With these budgeting tips, you’ll be well on your way to a financially successful college career!
