Budgeting

Budgeting

Quite often the terms student and budget are considered synonymous. However, students themselves often find it difficult to actually implement a good, solid budget plan. This is usually the case because a student budget has certain challenges that a non-student budget plan doesn’t.

Mainly, students receive money in lump sums, such as student loans, bursaries, savings from their summer jobs, etc. So, when faced with a large amount of money all at once, it can be very tempting to spent a large amount at once. The following tips can help students avoid the pitfall of running out of money too early in the semester.

Budgeting3Personal Budget

If you’re a student, one of the biggest reasons as to why it’s important to create and maintain a solid budget plan is, mainly, so that you prevent the classic mistake of spending all of your money early, thus avoiding the realization that it’s December and you are broke, with your next student loan installment not arriving until March. Another off-shoot of creating and following a good student budget is that it’s an excellent way to begin learning how to budget large sums of money wisely, as a necessary skill for later on in life.

To create an effective student budget, the following are some key techniques to use. Firstly, when you’re beginning to create and implement your budget for the upcoming school year, try to plan on beginning that budget in the fall, as this is the time when you have maximized your savings from your summer job and have confirmed that you will be receiving student loans. Next, make a list of all your incoming sources of money for the school year, such as loans, summer job money, cash from your family, scholarships and bursaries, etc. Also make sure you have all dates clearly stated regarding when you’ll receive these various sources of income.

The next step is to plan out all anticipated expenses, such as your tuition (including text books and other college fees), as well as your living expenses like rent, heat and hydro bills, along with those other expenses such as food, laundry, brief trips back home to visit your family, as well as miscellaneous entertainment costs. Be sure to list the due dates for each of the bigger expenses like rent and bills. Also include some emergency funds in case of, say, your laptop breaks and you quickly require a new one. Furthermore, as another step, figure ways to save as much money as you can. For example, consider maybe living with other students to cut down on living expenses, taking the bus or riding a bike to school. One other way is to make sure your cellular phone plan is inexpensive and with lots of free texting.

Once you’ve got a budget down and have begun to follow it, it will be crucial to your financial success to be able to stick to that budget. One way to keep on track is to monitor your initial spending habits during the first month or so of school. If you find yourself going over budget on things like dining out or expensive textbooks, try to tweak the rest of your budget to accommodate the early spending. Also, use today’s great technology to your advantage, by paying your bills and monitoring your account balance via cell phone and internet banking. It’s quick, easy, and will cause much less stress in taking the guesswork as to how much money you have to work with while you’re on the run.

Budgeting1Earning Extra Money

Even by creating a great budget, from time to time you may still find yourself short on funds. Not to worry, however. There are still ways to make ends meet. For example, one way to make extra cash is a part-time job. Specifically, try to hunt down a part-time job close to campus so as to cut down on time (and money) when having to travel from school to work. So, your college library, pub, coffee shop, or bookstore are all ideal places to work. Secondly, think about the possibility of asking your mom and dad for financial help now and then, along with asking your school to see what sources of cash are available to you, such as temporary financial aid and emergency loans. Also, regarding loans, a loan from the federal government is a great source because while you are attending college, those loans will remain free of interest, and they will also not require that you pay interest post graduation (for a period of time). These loans also have a lower rate of interest than loans from a private institution, such as a bank, which not only begin earning interest on them immediately, but you most likely will have to start paying them back even before you are done school. Using credit cards can also be a quick and easy way to make ends meet. But beware! Credit card interest rates are usually quite high.

Key Points

As mentioned earlier, creating and sticking with a solid budget plan while you are in college will not only lessen the financial stress on you while you concentrate on your academics in order to have better employment prospects later on, but it will also teach you how to effectively budget your money so that by the time you have graduated you will have learned the very valuable life skill of good financial management. Furthermore, by managing your money wisely, you will have avoided a poor credit rating. Thus, by attaining a good credit score, you will ensure your ability to purchase, for example, a house or car later on.