Living on a College Budget
Congratulations high school graduate! Your childhood is essentially over and you’re moving on to meet the joys and challenges of the rest of your adult life. And if you’re one of the 2.1 million American high school grads who will be attending college this fall, your newfound independence will be put to an immediate test.
Perhaps for the first time in your existence, you’re going to need to figure out how to survive away from home, manage all your own activities apart from your mom and dad, and most importantly, start learning how to administer your own financial affairs.
And that means you’ll need to decide how to make it through the year on a college budget. So grab a pencil, open a spreadsheet and start figuring it out.
The first thing you need to do is list all of your fixed expenses. That includes tuition and fees, room and board, and health insurance, if you’re not covered under a parent’s plan. You will know what these costs are because your college is going to send you your fall semester bill sometime in July.
Next, you should enter how much money you have to pay for everything. That means including money from a parent and other relatives, your own savings, any earnings from summer or part-time jobs, scholarships and work-study opportunities, other miscellaneous sources of cash and what you expect to borrow in federal and private student loans.
Hopefully, there will be money left over after meeting your fixed costs to cover your variable costs. These expenses include books, classroom supplies, transportation, groceries and snacks, personal items such as toiletries, haircuts and laundry, clothing, phone bills, recreation and entertainment, and any student loan interest you may have to pay while still in school.
Of course, here is where you’re going to have to make some estimates and choices, based on what you have left to spend after meeting your fixed costs.
As your first semester progresses, you will have to track all of your variable expenses to determine where you may be over or under budget. By continuing to review and modify your plan, you will find ways to reallocate your spending so that you can live within your means. Make sure to sock a few dollars away for emergencies.
In order to stick to your budget, you’ll need to exercise good judgment and self-discipline. Being a smart consumer helps, too. For example, look for any student discounts offered by local merchants; buy used books; rent textbooks or borrow them from the library whenever possible; take advantage of the “free” college events like movies and concerts you’ve already paid for with your activity fees; when calling home, use Skype instead of phone minutes.
Most importantly: Set limits for yourself on how much you’re going to spend on your entertainment. Remember that extreme partying can lower not only your grades, but also your bank account.
Creating your college budget is actually the easy part. It’s sticking to it that’s hard. But once you get into the habit of being fiscally responsible, your college years be filled with less worry and you’ll be creating the kind of good money habits that will suit you years after you graduate.
– Guest blog by Al Krulick
Al Krulick is an award-winning journalist with dozens of years of writing experience. He writes and blogs for Debt.org.