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A College Student’s Guide to Building a Budget

College is a period of significant change and growth for students. It marks the beginning of financial independence for many, requiring the development of effective money management skills. Creating a budget is essential for college students to effectively manage their finances, which allows them to focus on their studies and alleviate added stress from money concerns. This comprehensive guide is designed to help college students build a budget that works for them. 

1. Choose a School 

First, students need to decide which college they want to attend and when they hope to start. Knowing which school they will be attending is essential for understanding how much their education is going to cost. This knowledge will help them decide the best way to fund their education and help with building their college budget. 

2. Know Income Sources  

Students should have a firm understanding of all income sources. By creating a list of all known monthly sources of income, they can effectively manage a college budget. For income that is not consistent, students can estimate the average amount by looking at past monthly earnings.  

College students may have income coming from various places: 

  • Family support: Regular allowances from parents or guardians. 
  • Scholarships and grants: Whether based on merit or financial need, scholarships and grants provide funding that does not require repayment.  
  • Part-time work: Earnings from on-campus or off-campus jobs, or paid internships
  • Student loans: Borrowed funds known as student loans must be paid back with interest after graduation. It is important to take the time to carefully consider which type of loan is the best choice for helping cover the cost of school. There are a few types of federal student loans available to students such as Direct Subsidized and Direct Unsubsidized Loans, Direct PLUS Loans, and there are also private loans to consider. 

3. Track Expenses 

Knowing where money is being spent is a major part of learning to budget. By categorizing spending, recording all expenses, and regularly reviewing financial activity, students can gain control over their finances. Students should track all expenses for one month to get a clear idea of how things will go.  

Categorize spending into: 

  • Fixed expenses: Tuition, rent, insurance, and other regular, unchanging costs. 
  • Variable expenses: Groceries, utilities, transportation, and entertainment. 
  • One-time expenses: Books, supplies, and other occasional costs. 

4. Learn the Difference Between Wants and Needs 

Learning to distinguish between wants and needs is especially important. Prioritizing spending on the essentials like food, housing, and textbooks should always come before distributing money for the non-essentials like dining out, entertainment, or travel. Doing this will help to prevent extra stress by allowing for discretionary spending while maintaining financial stability. 

5. Set Financial Goals 

Setting clear financial goals will help with sticking to a budget. Write down all short-term and long-term financial goals and keep them in mind when planning a college budget.  

Some common financial goals might include: 

  • Saving a certain amount of money each month. 
  • Paying off a part of student loans or interest. 
  • Creating an emergency fund. 

6. Build a Budget Plan 

Create a financial budget plan that details all sources of income and expenses. Be sure to track spending and savings in order to achieve financial goals. Use the simple budget template provided below to kickstart the budget building process: 

Category Monthly Budget 
  Income  
  Parental support   $
  Scholarships/Grants   $
  Part-time job   $
  Student loans   $
  Total Income   $
  
  Expenses  
  Tuition   $
  Rent   $
  Groceries   $
  Utilities   $
  Transportation   $
  Entertainment   $ 
  Savings   $
  Miscellaneous   $
  Total Expenses   $
  Balance   $

Make sure the total expenses stay below the total income to support a positive balance and adjust spending as needed in different areas to achieve this goal. 

7. Budget Review  

Keep a close eye on financial circumstances and spending habits as they evolve. By reviewing the set budget on a regular basis, it will ensure current spending habits are reflected. Try going over the budget plan monthly and adjust budget categories and spending as needed to stay on track.  

8. Seek Financial Advice 

Remember to reach out for advice when struggling with creating or keeping a financial budget. Many colleges offer financial counseling services for students. There are also budgeting tools and apps to help with managing finances. Additionally, talking to financially savvy friends or family members can offer valuable insights to help with the process. 

Building a college budget is an essential skill that helps students with managing their finances effectively, reducing stress levels, and achieving their financial goals. By understanding income, tracking expenses, and making informed spending decisions, students can create a budget that supports their college experience and sets them up for future financial success! 

Ask Westface College Planning for Help 

At Westface College Planning, we offer support in navigating the financial aspects of college, guiding you through the entire process. If you’re interested in learning more about how we can help, schedule a complimentary consultation with us today!

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