College Budget: Create Your Worksheet Now
As a new college student, managing money can be one of the keys to a college financial success. Typically, students receive money in large chunks, either from loans, education savings plans or summer jobs. If a student is managing their money for the first time, it can be tempting to spend big early on. However, students need to make this money last for several months so that they won’t struggle to pay bills later on. Here are a few easy steps any college student can use to stay on track and avoid that end-of-semester crunch.
Make a Budget Before Starting College
For many seniors, graduation signals the beginning of summer and their freedom. But before your senior goes off and starts their vacation, sit them down and help them create their upcoming college budget. Most students will groan and moan, but making them create a financial plan will save them from running out of money before their next source of income comes in.
Where To Start
Start by figuring out what your student’s income is, such as student loans, paychecks or help from Mom & Dad. That’s the student’s income. Now make a list of all fixed costs such as tuition, books, phone, rent and utilities. Also write down when they are all due. Next, estimate your regular discretionary expenses like food and laundry.
Once your student has figured out their essentials, have them consider the money they have left over and make a budget for that as well. Whether it is $30 or $100, determine how much your student will have for fun like shopping or a road trip.
Avoid Using Credit Cards
Credit cards may seem like easy money to many college students, but make sure to explain to them that easy money can lead to easy debt quickly. The best strategy is to avoid using credit cards altogether, but if your student feels they need one in case of a serious emergency, consider getting a credit card with a low credit limit such as $300. This way the limit is low and easy to pay off.
Stick To It!
Once you have it all planned out, stick to it! Have your student write down their expenses for the first few weeks and compare it to the budget they’ve prepared. Did they have to buy new textbooks instead of used? Are they eating out more than planned? If so, adjust the budget accordingly.
Tip – Most students have a smart phone. Have them download an app such as Pennies that helps them keep track of their budget. This way, the moment they open the app they know how much of their budget they have left.
Finally, click here for an example of a budget worksheet to use in your college planning efforts.
What tips do you think students should follow to create an accurate college budget?
Westface College Planning can help you navigate the college saving and funding process from start to finish. To learn how we can help you call us at 650-587-1559 or sign up for one of our Tackling the Runaway Costs of College Workshops or Webinars.
Photo Credit: Images_of_Money
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