Over the past few weeks, we’ve been talking a lot about paying for college. We’ve walked you through evaluating your financial situation, determining what income sources will be available to you, as well as if you should take out student loans and which are the best student loans to use based on your unique financial situation. This week we will put a bow on our Paying for College series with strategies for creating and using a college budget. These strategies will help you keep things simple so it’s something you can really stick with. Let’s get started!
STEP 1: Talk with Your Parents or Guardian
We’ve already encouraged a lot of conversation between students, parents, and guardians before this point to determine what the financial situation will be as well as determining if student loans will be necessary. Even after having the initial conversation and determining some of the first steps, it’s important to continue the dialogue and have more conversations so everyone is on the same page. For parents, this means setting a conservative financial commitment and for students, keep communication lines open to avoid surprises down the road and remain thankful for your parent’s contribution.
STEP 2: Determine and List Out All Expenses
While expenses will vary from person to person these are some that almost everyone will encounter and will need to account for.
School
Tuition
Rent / Room and Board
Books and Supplies
Living
Groceries / Food
Wellness (medications, dietary needs, toiletries, haircuts, potential doctor visits)
Car (The payment if you have one, insurance, gas, and repairs)
Travel
Commuting Home / Road Trips (Especially if flying is necessary to get home)
Fun
Social budget (It’s more necessary than you think!)
Future
An Emergency Fund
Savings (Especially if you are taking out student loans)
This is not an exhaustive list and you may have more that you are responsible for, but this is a great starting place. Try and think of everything you may need to spend money on – big and small – and consider a reasonable amount that you would spend on it every month. This will begin to shape up your college budget. We actually have something that will be really helpful in this! Download our free college budget worksheet by shooting us a message anytime!
STEP 3: Tracking and Adjustments
The first two steps in creating a college budget happen before you ever step foot on the college campus, but it doesn’t stop there. Most of what you have put on paper has been theoretical. Beginning to track the items you’ve added and testing to see if the amounts you have down as correct and reasonable.
This may be an enlightening experience and can help to add awareness and consciousness of what things cost and influence your choices moving forward on what to spend money on.
Perfection is not the goal here. Awareness and progress are. You won’t be able to hit your budget perfectly every single week, but being aware of what is happening will allow you to adjust, plan, and most importantly avoid unforeseen emergencies and financial stress.
If you’ve never worked with a budge or spending plan before it may take a little period for adjustment. It will take some time to get it right and you won’t be perfect, but having something to measure your spending against is going to be extremely beneficial for your financial situation.
The Bottom Line on College Budgets
Creating college a budget is not only going to set up you up for success throughout your college career but your adult life! Knowing how to handle your money and taking care of it well is a crucial part of growing up – with the right tools, you’ll succeed with flying colors!
Don’t forget about our free worksheet to help you get started!
