How to Make a College Budget
If you’ve never managed your own money before, budgeting might seem extremely daunting. In reality, it’s actually simple, straightforward, and has the potential to save you a ton of money in the future.
Mary Pearson, accounting professor and interim associate dean of the Southern Utah University School of Business, has always been an accounting guru. Her love of numbers and managing finances extends beyond her personal clients into the accounting classes she instructs. In her experience, budgets are worth more than the few saved dollars.
“Financial stress has been referred to as the leading cause of depression and divorce,” said Pearson. “Practicing the principle of budgeting leads to financial freedom and personal growth. Budgeting helps individuals and businesses plan for current and future expenditures, providing a pathway to meet immediate and long term financial goals.”
As Pearson has said, the little things you do now add up fast. To help you get off on the right financial foot, here are 5 steps to help you make your college budget.
- Track what you’re doing now. Keep your receipts, make a spreadsheet, or use a budgeting app to determine where your money goes each month.
- Define your fixed expenses. Write down all your recurring bills, including phone, rent, subscriptions (NETFLIX), gas, credit cards, etc.
- Determine your income. If you have a job, figure out how much you’ll bring in each paycheck and each month. If you don’t have a job, sum all the money you have saved and divide it evenly throughout the school year.
- Balance your budget. Allocate money to your fixed expenses FIRST, including food and clothing. Save for unexpected expenses, too, like medical emergencies or vehicle maintenance. Put money aside now for Christmas/birthday gifts and vacations. (If one month seems daunting, set a weekly or bi-weekly budget.)
- Stick to your budget. This is the most important step. Budgeting pays you long term, so stick with it to see results.
- Adjust accordingly. Look at your monthly trends and redistribute funds based on where you need the money. Budgets are meant to free you financially, not restrict you.
If you struggle with creating and sticking to a budget, you may consider enrolling in a few accounting and finance courses. These courses tend to focus around business finances but ultimately relate back to individual financial management and freedom.
Here are some other helpful resources:
- Budgeting help: https://studentaid.gov/resources/prepare-for-college/students/budgeting
- Budgeting in College: http://www.bestcolleges.com/resources/budgeting-in-college/
- Budgeting Planner: https://www.moneysmart.gov.au/budgeting/budget-planner