“A budget is telling your money where to go instead of wondering where it went.”
– Dave Ramsey
No matter how funny the quote sounds, every word is true to the T. We all have been in the situation where we kept wondering, ‘My bank account had $500 two days back, how come I have only $50 left now?’ Well, the answer lies in your budgeting skills.
Recent reports show that close to 50% of students face financial difficulties because they have no idea about budgeting. Since college students have a lot of expenses, starting from paying for their classes to partying with friends during the weekend (you do, right?), we feel it will be useful for you to know a few budgeting tips for college students.
Therefore, to ensure you have full control of your money, go through the 7 simple budgeting tips. But before you go through the tips, understand what money management is and why you must learn how to budget.
What Is Budgeting?
College students are often not taught about what budgeting is. So, when they step foot on a college campus, they feel like they are on their own. But that’s not the case, for we have got your back.
In simple words, budgeting can be defined as the process of managing your money. Here are the key steps to effective budgeting:
A. Track What Comes in
The first step to managing your money is to track and record what comes in each month. College students can note the salary they earn from part-time jobs, pocket money from their parents, and any financial aid they receive (if available).
B. List Down the Expenses
You will have quite a few expenses. Instead of paying bills as and when you receive them, note down your monthly fixed expenses, starting from living expenses to paying the instalments of student loans.
C. Do the Calculations
Now that you have both the income and expenditures, do the math. If you find your expenses exceed your income, cut down on a few expenses. However, if you see that you are saving money, don’t get excited and look for ways to spend it. Keep the money saved for emergencies.
Without further ado, let’s take you through the 7 budgeting tips that no one talks about.
The Top 7 Budgeting Tips for College Students
Let’s take you through the 7 simple budgeting tips for college students. Learn and implement them to create a budget and avoid unnecessary expenses:
1. Track Your Spending
The first thing you need to do is understand your finances. You must track your monthly income and college expenses. Look for digital tools to make monitoring your finances easy. You will find apps where you can integrate all your accounts, from savings accounts to credit card accounts, for better tracking and budgeting. Use a student budget planner to track spending.
You can also go through a few time management tips for online students to manage their time properly.
2. Set Long-Term Financial Goals
In order to achieve financial independence, it is recommended that you start early. Long-term financial goals start with planning a college student budget. You need to have an emergency fund. As you move forward, you can change your plan and set aside some money for long-term financial and budgeting goals.
3. Implement the 50/30/20 Rule
You don’t have to stress over complicated spreadsheets or apps. Instead, use a simple budgeting 50/30/20 rule. Here’s what it means:
- 50% of your money is to be spent on your needs
- 30% on wants
- 20% will be savings or debt repayment
This is a great way to divide your money and spend it wisely. However, before you do so, go through your monthly budget for the last 30 days. It will help you spend your money using this rule. Learn how to save money in college using this trick for a better college experience.
4. Ask about Student Discounts
Look for places that offer student discounts. Use your student ID to get discounts on things you buy. This will help you spend money wisely and save some money for the next month, or add it to your savings account. Unlike online class help services, restaurants and movie theaters do not offer any discounts. So, don’t shy away from asking for discounts whenever you want to get something for yourself. This is one of the effective tips for money management for students.
5. Buy Old Textbooks
When you have to maintain a budget, you must look for ways to cut down on costs wherever possible. Since you are already paying a good amount for your tuition fees, look for places that resell textbooks. In case of an online class, you can look for free libraries to gain access to e-textbooks. These will help you save money and control your expenses.
6. Earn Money
An important part of budgeting lies in increasing your earnings. For example, if you are getting $300 every month, and your expenses are $350, you must find a way to earn more money. The best way to earn money in college is by leveraging the holidays you get. There are various options for students to earn during that time. Get yourself a part-time job to balance your income and expenses.
7. Use a Reverse Budgeting Approach
College life is all about enjoying with friends and creating good memories. However, if you are spending too much in the process, the memories will not look that good as you move forward. If you feel the expenses are growing, use a reverse budgeting method to control things. Fix savings goal instead of controlling college expenses. This will help you save the money you need for unexpected expenses and is one of the effective financial tips for college students.
Now, the question you might have is, “Why do I need to know how to budget? I have just started college and have even got a scholarship, so why is it necessary?” We will answer that in the following section.
Why Learning How to Budget Matters?
Despite the fact that you have just started college and have also received a scholarship, you must know how to spend the money wisely. The main reason here is that students often end up spending a lot more than they get and struggle at the end of the month.
Learning how to budget will help you manage money properly. You will be able to track your spending and see if you can cover your monthly expenses. Further, it will also help you control your spending habits.
Budgeting will help you make sound financial decisions, and starting it in college will benefit you in the long run. Additionally, you will be able to spend a few bucks on yourself to enjoy with friends and save some money for emergencies. Therefore, you must learn how to manage your money correctly. You must also know about the cost to hire an online class taker to manage your money correctly.
Before we end the discussion, let’s take you through the financial literacy of college students. This will help you understand the reason you need to start budgeting from the very beginning.
An Insight into the Financial Literacy for College Students
Recent reports indicate that college students’ financial literacy is generally low. A survey of 31,000 students, primarily undergraduates from a public university in the Southeast US, found that 46.2% scored very low when asked about finances.
This is a significant concern among college students, making budgeting even more critical.
Don’t get tensed, we have the best college budgeting guide to help you manage your money and establish good financial habits.
Final Thoughts,
Budgeting is crucial for college students. You need to have control over your money, after all you it’s your hard-earned money, why spend it without keeping a track? Write down everything to understand the income and expenses. There will always be variable expenses, but having some money saved to cover those expenses will only help you in the long run.
This does not stop you from buying new clothes or enjoying a weekend with your friends. The objective is to help you develop healthy financial habits and provide help in managing expenses in college.
Start budgeting today!