College is challenging enough without having to worry about saving, spending and budgeting! To make things a little more simple for students, here are six steps to help you stick to a budget in college.
Step 1: Make a Budget
Well, duh! You can’t stick to a budget in college if you don’t make a budget, first. If budgeting isn’t something that happened in your family growing up, creating a budget may feel like a challenge – but it’s also a skill that will stick with you for the rest of your life.
You can download an app like Goodbudget or YNAB (You Need a Budget), or, grab a free notebook on orientation day and designate it your official budgeting notebook. Either way, you’ll start by listing your monthly income (whether that’s from employment, savings, your parents or a combination). From there, map out how much money you can allocate to various expenses. Start with the ‘musts’ like college tuition, food and housing, before moving on to the ‘nice to haves’. Then, congratulate yourself. You’re budgeting!
Step 2: Monitor and Record Your Spending
Some budgeting apps connect to your bank to help you track your spending, but if you’re new to budgeting, it’s a good idea to manually record your spending for at least a month or two. This practice gets you into the habit of being spending-aware and mindful about every single purchase. It’s especially important if you’re paying for most things via a credit or debit card – as many college students do.
Record your spending via your budgeting app or budgeting notebook. Notice if your spending isn’t matching up to your original budget – it may mean you need to either adjust your budget for next month, or be more careful about your spending.
Step 3: Challenge Yourself to Cut Down
As prices continue to rise, college students may find it difficult to stick to a budget. Don’t be discouraged, but do challenge yourself to cut down. Use your budget to see where the extra spending is coming from. Do you tend to splurge after a good test result? Are those morning mochas adding up to an unaffordable habit?
Choose three small habits you can tweak to help keep your spending on track. If you’re living with roommates, start an open conversation about money. Maybe they’ll want to join in with your cut-back challenge. Figuring out how to have a great college experience on a budget, as a group, can be a fun and effective way of helping everyone reach their financial goals.
Step 4: Use Credit Cards Wisely
Credit cards have a lot of benefits for college students trying to stay on budget. They can boost your credit score, put cash back in your wallet via spending rewards, and enable convenient money management online. But: that’s only if the credit card is used wisely.
If you’re planning to use a credit card in college, choose a card with simple terms, good rates, and no gimmicks. Most importantly, only spend what you can afford and make every effort to pay off your entire credit card bill every single month. Keeping a balance on a card means generating interest, so the amount you owe will only continue to rise. If you’re struggling to make ends meet, look into the possibility of increasing federal student loans rather than spending with a credit card, as student loans tend to have more favorable rates.
Step 5: Save
Budgeting isn’t just about spending – it’s also about saving. Try working a certain amount of savings into your budget each month. It doesn’t have to be a lot. Setting aside $5, $10 or $20 per month will add up faster than you think; and most importantly, starting the savings habit in college will help you to make it a life-long practice.
Step 6: Ask for Help
Finally, if you’re finding it a challenge to stick to a budget in college, remember that you’re not alone! Check for financial programs through your college, and speak with your credit union or bank about what resources are available to assist members with financial management. HUECU, for example, offers access to the GreenPath Financial Wellness Program as a benefit of Credit Union membership. Pick up the phone or stop into a branchand have a chat. You might be surprised by what help you can find if you just ask for it.