As a new college student you may have heard your parents or other adults talking about budgeting. To most people, the word “budget” can be just as scary as someone popping out and saying “boo!” on Halloween — especially if you don’t know where to start. Don’t be spooked about creating a budget when it can be extremely necessary when you’re juggling living, tuition, and other school expenses as a college student. With technology, creating a budget can be pretty simple and access to push notifications on your smart phone can make it easy to stick to your budget.
1. Analyze Your Spending
If you’re not sure where to start with your budget, keep track of your spending and earning habits for a month. If you have online access to your bank statements and account activity, you can look at the previous month. How much of these expenses are the same (fixed) each month? These would be costs like your cell service, car insurance, car payments, and (if you pay it) rent. If you can look at multiple months, you can see how much on average you spend on food, entertainment, shopping, etc. After analyzing, you’ll compare this with how much you earn, whether it’s through a job, an internship, a scholarship or an allowance. Keeping your receipts can also assist in analyzing your spending.
2. Use Technology
There are a variety of free mobile apps out there that can help track your spending, your budget, and other money-related areas. Some apps can remind you of when to pay bills and when you’ve gone over your budget. You can even simply make a spreadsheet with your spending goals and fill in when you spend money in each category for the month.
3. Stick to Cash
Even with convenience of mobile payment methods and online payment services like PayPal, this can lead to the temptation of going over your budget. Using a credit or debit card or even your phone is as easy as breathing sometimes, which means you’re not being conscientious of your budget and spending. This is when the “old-fashioned” strategy of sticking to a cash budget can come in handy. Set aside a certain amount of cash that you can only use on purchases that are not your fixed expenses. This way, the spending seems more transactional in your mind. You are physically handing over your money instead of swiping a card or scanning a mobile app.
4. Use Coupons & Incentives
If you’re sticking to a strict budget while you’re in school, it can seem very limiting and appear that you won’t have any “fun money.” This is where coupons and incentives come into play. Use coupons, whether they’re the kind you clip or the online ones through savings apps, you can save significant money that would otherwise be splurging or exceeding your budget. For example, if you want to eat out, find a restaurant that has a good deal or coupon. Another option is building your credit with a credit card that has some incentives and rewards on it. There are some perfect credit cards for college students that give you cash back on gas and food purchases as well as other spending categories.
Come back to the Future Institute Blog for more advice, tips, and tricks to help you get through college!