While many people say the best things in life are free, sometimes it doesn’t feel that way when you’re a college student. With increasing tuition, book fees and expensive nights out, college expenses can be overwhelming.
Money management and financial planning are great ways to ensure you get the best bang for your buck throughout your college years. By following these quick and easy steps you can develop healthy, long-term financial habits that will better your future.
List all of your monthly expenses. Defining your expected monthly expenses allows for an effective allocation of your resources. Be sure to include costs for laundry, transportation, entertainment, toiletries, additional shopping, miscellaneous expenses and any other monthly obligations. It’s always safe to budget for a little more than you plan to spend.
List a long-term goal. Think ahead. While immediate expenses are your primary concern, budgeting can allow you to plan ahead for the future. Consider costs for graduate school, loan payments after graduation or maybe even a spring break trip with friends. Having money saved can save your blood pressure.
Include in your monthly expenses a set percentage to be put aside in savings.
Many people allocate 10 to 25 percent of their income for savings, but you should find a monthly savings amount that works for you.
List sources of income. After listing all of your expenses, list all possible sources of income to cover your expenses. Consider a campus job or even selling books or other unused items on websites.
Also make sure to reach out to parents, who are likely to lend more financial support when they see that you are being responsible and budgeting.
Find ways to cut expenses. If your expected monthly expenses are greater than your expected monthly income, then that means that you are planning to spend money that you don’t have. You need to figure out where you can cut your expenses so at the least it’s equal to your expected income.
Lowering your allotted expenses for entertainment is a great place to begin. Instead of spending money at the movie theater, opt to attend free campus events. Once your expenses are less than or equal to your income, you have a budget.
Stick to it! The most important part of budgeting is sticking to the plan. It requires discipline, but the end results can be very rewarding.
Sticking to a budget may not seem fun, but it’s important –– imagine if a government didn’t. Oh wait…
Smith is a member of the class of 2012.
