Starting college is quite an achievement. It is however sad to say that most first-year college students find it as a great financial burden. One has to make tough choices on how to spend their money, as there are potential expenditures coming in the form of tuition fees, worth of the books, rent for the accommodation and so on. To ease you in adjusting to this new kind of life, here is the ultimate student budgeting finance checklist – a complete guide to managing personal finances as one goes about his or her college studies.
1.Assess Your Income Sources
In order to follow a budget, you have to know where your money is coming from. As a student, your income may come in the form of savings, a part time job, financial aid, scholarships or family funds.
Identify and track all your income sources and quantify the amount that will be available to you every month. If your income varies, for example in case of a part time job, do not overestimate your income or else you risk going beyond your expenditure. This knowledge will allow you to allocate reasonable expectations while drafting your budget.
2. List Essential Expenses First
The next challenge is determining your core needs in terms of costs. These are the non-negotiables such as, tuition fees, habitation fees, household expenses, maintenance of individual expenses and transport costs. In calculation let it be as precise as possible and segment these amounts into monthly portions.
For example, if you are on rent for every semester, you can take how much you have paid and divide that by the number of months in the semester so that you know how much to save in each of the months. Similarly, do not forget additional necessary expenses, such as going for laundry or paying your phone bill, which although minor can be expensive in the long run. This way, you will understand which expenses are crucial for you and how much money will remain for other things.
3. Account for Variable and Discretionary Spending
After all your necessary expenses have been accounted for, now you can move your focus to the variable and discretionary spending. This includes such things as entertainment, going out to eat, buying new clothes, personal hygiene products, etc. These are areas that are not fundamental and if none of them are met, you can always try to ease off on spending.
Keep in mind a rational amount that you can spend every month on these types of expenses. While these boundaries will be appreciated, they are mainly put in place to avoid the tendency of buying on impulse. You do not have to deprive yourself of things that are pleasurable, rather, avoiding needless expenditure where possible is that way of spending extravagantly.
4. Use Budgeting Tools and Apps
Understanding your finances on your own can be very daunting given many expenses to reconcile with. Fortunately, you can quickly find several free or inexpensive budgeting apps designed specifically for students. Budgeting becomes easier with the use of budgeting programs like Mint, YNAB (You Need a Budget), and PocketGuard, which enables real-time tracking of expenses.
These apps allow you to set financial goals, categorize your expenses as per budget and send you reminders if you happen to approach the set qualifying limits. The ease of using these tools tends to keep you responsible while making sure no chances of spending excessive money unintentionally are available.
5. Plan for Savings and Emergency Funds
Saving money with the intent to use it in the future for some reason is another important aspect of budgeting that students tend to ignore. Disturbing your limited budget can still allow you to create a habit of saving. Be it saving up for a planned vacation tour in future or any unplanned clinic visit, having a reason or two to save money can be reassuring.
One of the tempting but important goals is to have a contingency plan for extra costs that you did not foresee. It’s about the nature of living, so there will always be such things as regular breaks or laptop malfunctions followed by a repair. Start by putting aside at least 500 dollars and increasing this amount step by step further on.
6. Review and Adjust Your Budget Regularly
Creating a good budget is not a one off event, instead it is dynamic so to say and therefore needs to be reviewed on a monthly basis. Your financial situation may change throughout the year. New job opportunities or scholarships might come up or new expenses get in the way.
Take some time every month on a specific date to evaluate the budget you had set out. Try to see what areas you have spent excessively and which areas you can spare some cuts. Don’t hesitate to make necessary adjustments to your budget forecast where it fails; this is especially during the first few months when establishing one’s budget. This type of ongoing adjustment focus is paramount if a student is to remain better off financially throughout college.
Final Thoughts
Once you’ve gone through this ultimate student budgeting finance checklist, you are well prepared to handle your finances such that you do not have to be financially stressed when you start college. Whether it is evaluating your income and meeting basic needs, establishing your savings goal, or using the ideal budgeting tools, every step is meant to keep you within budget. Be aware that budgeting is hard and takes time to learn but building good budgeting practices over time will make sure that you do not have to worry about money management activities in college and afterwards.
