Save on textbooks.
As if paying for tuition isn’t enough to clean out your savings account, when you go to college, you still have to pay for the everyday essentials.
How are you supposed to pull it off?
There’s stuff you’ll really need (like toothpaste, shampoo…or whatever a college student considers “necessary”), and then there’s stuff like going out to dinner with friends, buying T-shirts and other apparel for events, and all of those trips to Starbucks.
How will you manage paying for it all?
Here's how: You make a plan for how you’re going to spend your money, also known as a budget!
Budgeting 101Why should you make a budget? Consider it disaster prevention. Many people tend to go a bit crazy freshman year and buy a ton of stuff—everything from food to school apparel at the on-campus bookstore. Avoid the on-campus bookstore at all costs―it’s usually way overpriced.
Pretty soon, you’re scared to look at the balance of your credit union account (speaking from experience). Budgeting will help you avoid overspending. You won’t feel tempted to impulse-buy if you know there’s something else that you have to get.
Create your spending planThe basics of making a budget are easy. First, consider the money that you will have available for spending—your income. If you’re computer savvy, an easy way to do this would be on an Excel spreadsheet or with a program like Quicken.
You can also write it down:
- Write all your different sources of monthly income in one column.
- Calculate your monthly expenses.
- Write the categories that are relevant to you in one column, and the expected cost of these expenses in another column.
- Add up all your expenses, and you have your monthly expense total.
- Subtract your expense total from your income total, and there’s the amount you can save!
Read Ken's blog to learn six simple ways to reduce college costs.
Later, once you have a regular job, you’ll do this in reverse—pay yourself first by pulling an amount into savings, and living on the balance. But that isn’t too realistic for a college student.
For extra reinforcement, stick your budget sheet up on your wall or on your desk―somewhere where you’ll see it often.
This is my favorite technique to use, because I won’t be tempted to spend my money on anything else if I am constantly reminded of my expenses. Personally, I like to write it on a dry erase board above my desk—that way I can allow for changes and it’s in a spot where I’ll see it daily.
An easy way to get started making a spending plan is to...