Entering college is an exciting time, filled with new experiences and opportunities. However, it also comes with a new level of financial responsibility. Managing your finances wisely during these years can set the stage for a lifetime of financial freedom. That’s why I’ve created some practical budgeting tips for college students to help you navigate this crucial phase of your life!
I’v struggled with excessive spending the second I started earning my own money, and it truly impacted my future savings because I made a lot of mistakes along the way. Luckily, what they say about learning from your mistakes is true, and I turned my spending around in a positive way (finally). This takes a lot of patience and understanding from your own end, so whilst you read through these tips, remember self-compassion is the first step! These budgeting tips for college students are meant to help you, and not cause you to put more pressure on yourself.
With that being said, read on!
Table of Contents
Smart Budgeting Tips for College Students: What Do you
Need?
You don’t need much to start using your finances properly, just a few items I’m going to list down for you below:
- A Calculator
- A lined notepad – This will be your finance tracker, with all your budget plans, expense trackers and more.
- Pens and Rulers
Sounds easy enough right? Keep reading to learn how you’ll put them to use!
1. How to Budget as a College Student: Calculate Your Total Income
Budgeting is not a simple task, and if you don’t gather all of the information needed to start, then you won’t budget properly.
Everyone’s situation as a student is different, some are receiving a loan from a bank, are funded by their parents or are working part time jobs to make ends meet. Whatever your income is, there obviously is some flow of money that you are receiving, or you’d have no way of sustaining yourself in college!
If you have multiple sources of income, the most important thing is to list each of them down. Have a section for each type of income, so that you know where exactly your money is coming in from. No matter where it’s coming from, you need to have a record of every last cent you’re receiving monthly. Since income can change from month to month, it’s good to set an average amount so that you can have something stable to work with when budgeting.
You can take your sketchbook and plot a page out like I’ve attached here, noting any type of income that’s going in! Once the month has passed, you can repeat the same process on another page to track the next month!
This is going to help you organize the money in your account so that you can spend and save wisely! There’s a way to enjoy student life and have a stable bank account. Knowing about every cent coming into it is a vital first step! These budgeting tips for college students are tried and tested, by the one and only – me!
2. Great Budgeting Tips for College Students: Make a List of Expenses
Now that you’ve taken note of your income, you need to be aware of where it’s being spent.
Whether you’re a student who is still living at home whilst attending college or living independently on a college campus, you should always be aware of your expenses.
One of the best budget tips for college students that I can give is to get ahead of your expenses. Money leaks out way faster than it goes in! Living expenses eat away at your bank account bit by bit and before you know it, you’re wondering where all your money went!
It’s happened to me way too many times. I would spend money carelessly at the supermarket, buy expensive amounts of food (and drinks) on nights out, and then regret it later. For me, it started as a one-time thing that turned into a vicious cycle. However, once I faced the truth about my spending, I made an effort to start tracking my expenses.
Actively being reminded of the money I have spent would make me stop myself the next time I’d impulsively buy something, no matter how small the price. This slowly helped me stop the habit and be more mindful of my purchases.
How Can I Track My Expenses?
Start by thinking about what you spend a lot of money on during your month. Is it food, entertainment, video games or clothes? Think long and hard about this and write it down somewhere in your notebook. Remember, to use these budgeting tips for college students properly, you need to follow every single step for the best results!
Then, on a new page, make a row for each of these following expenses: (Use the template attached for extra guidance)
-Living Costs
-Rent
-Entertainment
-Travel
-Hobbies
-Electricity+Water
-Internet
Then, turn back to the previous page and see if there’s any category you included there that you want to add to your expense tracker.
In your expense tracker, you will continuously add and edit the amount of money you have spent for each category per month. I would write in this box in pencil so that you can edit it until the month is over. Then you can write the final amount in pen!
This will start to give you an idea of the amount you spend on each category per month on average. It’s a good way to start recognizing patterns in your spending and fix them accordingly! In fact, tracking expenses is a great way to self-regulate your spending, which makes it a fantastic budgeting tip for a student!
3. Budgeting Tips for College Students: Do The Math
You’re on the third step of this guide, which means you have tracked your expenses and your income.
Now it’s time to crunch the numbers and figure out a plan. If you’ve tracked your expenses and they’re almost 3/4 of your expenses, you need to reconsider a few things.
It’s up to you to see how much you’d like to spend and save every month. Some people would try to save 60% of their income, whilst others may keep it 50/50. As a rule of thumb, I would suggest that you save at least 50% of your income!
Either way, you need to make a ratio of how much you spend, vs how much you save! Eg. $500: $1300. This will give you a lot more information to use to work into your budget, and help you save money properly! I’ll be honest, out of all the budgeting tips for college students I’ve included here…this is my least favourite!
Take note of this ratio somewhere, you’re going to need it for the next step!
4. Decide How Much You’d Like to Save Per Month
You’ve tracked your expenses and income, and you even know the total amount that you spend vs your income. Now, you can put it all to use to set a general budget.
This step is pretty simple, but incredibly important. You need to look at all the information you’ve collected and decide if you need to change your spending habits.
Are you happy with the amount you’re spending? Do you wish you were saving more or less? These are all questions you need to answer before you can set your budget’s intentions.
Once you’ve decided how you wish to divide your spending, write down on an amount you’d like to be saving per month. Let’s say your goal is to save half of your income of 1200, you’d ideally save 600 euros for spending and the other for your savings account.
Related: Goals: Unleash Your Potential and Reach New Heights
Of course, you need to make sure that your basic living expenses are covered with the amount you’re budgeting! Always keep a small amount for leisurely spending, or budgeting will feel like torture!
5. Allocate Your Monthly Spending Money to Each Category
Remember those categories you listed in your expense tracker? You need them again if you want to follow these budgeting tips for college students!
You need to allocate the money you’re spending in your monthly budget to specific categories. By doing this, you avoid spending more on ‘clothes’, as opposed to ‘living costs’.
Some of your expenses are more important than others. If you’re paying ‘y’ amount monthly for rent, that ‘y’ amount needs to be completely untouched and saved for that rent. That means if you can’t afford to spend, ‘x’ amount of money on clothes because of rent, you will have to make some cuts and spend less on clothes.
Expenses such as accommodation, living (food/water basic needs) and bills will have to take priority over expenses that you want. It might help to make a list prioritizing your categories in order, and allocation the spending money accordingly.
You can use your notepad once again and plot your page out like the table I attached here. You will compare the initial budget you assigned to a category to the amount you actually spent and calculate the difference. This will help you remain accountable for your spending, and stick to your monthly budget!
If you’ve gotten this far, congratulate yourself for sticking it through! It takes some discipline and patience, but anyone is capable of creating an efficient budget!
Conclusion
Achieving financial freedom as a college student may seem challenging, but it’s entirely possible with the right strategies and mindset. By tracking your income and expenses alone, you can positively change the way you spend money that better fits your lifestyle!
Be patient on your budgeting journey, it’s okay to make mistakes! Never lose sight of your goal and remember that improvement comes with time and practice!
Anything to share? Did you enjoy these budgeting tips for college students or were you unsatisfied? Let me know by writing in the comments down below!
