Budgeting 101 for College Students
Budgeting is a long-term game, so don’t expect immediate perfection. Here are three tips that will make it easier.
There are a lot of things to figure out when preparing for college. Your head is probably whirling with figuring out laundry settings, how to grocery shop, and whether or not eating instant ramen every meal is a viable option. Don’t worry — you don’t have to have everything figured out right away. College is a great time to learn and grow! Nevertheless, I have some tips that might make it easier.
Tip #1: Know Thyself
As the Delphic Maxim states, “Know thyself.” Each person is different, so what worked for me may not be best for you. The important thing is to be honest with yourself about your financial situation. Freshman year, I had unrealistic expectations. I wasn’t honest with myself, and it made balancing my finances difficult. The time before college is a great time to see where you are, so grab a journal and jot down where you spend money, how much you’re saving, etc.
Some questions you should ask yourself are:
- What are your absolute necessities (food, transportation, medication, etc.)? How much do you spend on those?
- How much do you spend on non-necessities?
- How much do you make right now? How much can you save?
- Do you want to work your first semester? If not, how much will you need to save in advance?
Once you have an understanding of where you’re at, you’ll be able to make informed decisions about your financial future. Maybe you need to tighten spending now and save for groceries next year, or maybe you’re in a better place than you thought. List your expenses and compare them with your income. If your expenses exceed your income, it’s time to make some adjustments.
Tip #2: Set Reasonable Expectations
I applaud your goals to spend responsibly and save money where you can. However, it’s important to set reasonable expectations for yourself. If you make your budget too strict, it may be impossible to follow, and you’ll abandon it altogether. While I don’t spend over what my budget allows, I also make sure I’m budgeting for things I enjoy. If a latte brightens your day, try to budget to make room for a morning coffee. If you love going to the movies, set aside money for a monthly ticket. If you know you’re prone to retail therapy, budget in advance so when you buy a pair of shoes, you can still afford a grocery run that week.
The “You Need a Budget Software” (a fantastic program) recommends giving every dollar a job. This means any time you earn money, take a second and split up that paycheck into different categories. Obviously, some of it will need to go to covering food and other necessities. Once that’s budgeted, though, assign some of your earnings to things you enjoy. The purpose of budgeting is to be in the driver seat of your finances and not let money control you. This isn’t about becoming Ebeneezer Scrooge! By setting reasonable expectations, you can purchase things you enjoy without guilt or worry.
Tip #3: Stick to Your Goals
Whatever system you use, make an effort to stick to your budget. This can be difficult — New York City is full of amazing opportunities with price tags. Enlisting a friend as an accountability partner or making a sticky note to remind you of your goal can make a big difference. Perhaps most importantly, budgeting softwares/spreadsheets are not overrated. While everyone has different budgeting needs, there’s probably a system out there that can help you stay accountable to your goals.
Have grace on yourself while you figure out what system works best for you. Budgeting is a long-term game, so don’t expect immediate perfection. I had a budget before coming to King’s, so I thought I would ace college finances–I was wrong. By the end of freshman year, I was so frustrated with finances, I stopped budgeting altogether. I spent way more money than I was comfortable with, and I felt stressed every time I pulled out my debit card. Don’t make the same mistakes I did! Brew a pot of coffee, open your spreadsheets, and get to work.
Pro Tip: If you’ve been admitted to King’s and have submitted your enrollment deposit, you can reach out to your admissions counselor for access to my free budgeting spreadsheet system!
// Photo by Richard Cohen //