Budgeting 101

Once entering the realm of college, managing your money is as vital as studying for the next test. Creating a budget for yourself is the first step to economize your money.

Between books, food, and extracurricular spending, you could easily blow through all of your summer savings in the blink of an eye. Here are some tips on how to avoid doing so:

Prioritize your priorities.

Everyone should have their priorities in line, especially when away at college.

Now that you are on your own and depending on yourself with your own money, you need to cut back on the little things that may feel like a necessity, but actually aren’t.

The main priorities should be having enough money for groceries, textbooks, school supplies, and gas (if you have a car on campus.)

To cut back on some things, try cooking dinner in the dorms with friends, instead of going out to restaurants and try to avoid going to the mall when you are bored because you will end up buying things that you don’t exactly need.

Keep track of your expenses.

Write down everything you spend your money on, no matter what it is.

Try creating a chart where all expenses are categorized into groceries, transportation, utilities, etc. Then, make four sections next to each one. This way, it is easy to see how much is being spent each week for the whole month on the different expenses.

Helping yourself visually, makes you realize how much you spend and it will eventually help to figure out how to save in the end.

Figure out your income.

Figuring out your income is a major part of maintaining a budget, unless you are a full time college student who only has time to work while on winter or summer break.

But if you are receiving any kind of an income, small or large, it is an amount that should be calculated into your budget.

Be cautious that your expenses are less than your income, or you will find yourself in big trouble (calling your parents and asking to borrow money.)

Having an idea of the minimum and maximum amount of money you will have each month is a big help.

If there comes a time, perhaps your birthday month, and you have some extra money floating around; put that into a savings account to use for some fun extracurriculars.

Experiment with different systems.

There are a number of different ways to track your spending and income. Personally, for myself, creating a hand written chart each month is the easiest for me, but everyone is different.

Here are some examples to try until you find the system that works for you:

  • Go to the bank and take out all of the cash that you’re allowing yourself to spend for the month. Divide the cash up into envelopes and label them by category like we discussed earlier.
  • Use an online service that does all of the organizing and categorizing for you, such as Mint.com, Budgettracker.com, Pearbudget.com, etc.
  • Create an Excel spreadsheet on the computer where you can set your cells’ formulas to deduct from your goal or limit. This way, you can see how much you have remaining for the month.

After experimenting with different systems and finding the one that works best for you, just stick to it! If this is your first time making a budget, it definitely seems a lot scarier than it actually is.

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All that a budget does is to help you stay afloat, financially, so don’t be scared of it!

Trust your system and trust yourself to stay within the means of your budget and you will have the whole, “being on your own at college,” thing down in no time.

Featured Image: Depositphotos

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