College can be a challenging time for students, but it doesn’t need to be stressful.
College students often struggle to manage their money and pay their bills on time as they move to this new chapter in their life. We are here to help you learn what you need to know about managing your finances as a college student.
Take Note of Every Expense
The first step in budgeting your money is to figure out what your monthly expenses will be.
You will have to pay for housing, utilities, phone service, internet access, and food while you are in college – it’s just the way things work! While different students have different living arrangements, most students will need to pay for these things. You may also need to consider the costs of transportation, textbooks, and other school supplies. Also, don’t forget the costs of any extracurricular activities or hobbies you want to pursue, like joining a club or participating in intramural sports.
From Netflix to the water bill, write down every single monthly expense you have. The more you know about how much all these things cost each month, the better prepared you can be for managing your money.
Begin with Your Fixed Costs
The first type of expense in factor into your budget are the ones that don’t change, or changes very little from month to month. This can include any bills you pay that are not negotiable (meaning the payment cannot be negotiated by a credit card, check, or cash, such as rent payments and car insurance premiums. These are important to remember and can serve as the foundation of your monthly budget.
List your Flexible Expenses
The next step is to determine your variable expenses – these are the monthly bills that change from month to month depending on how much you use. Common examples include utilities, groceries, transportation or gas, and even some cell phone plans. It can be very easy to go over budget with these types of expenses and is crucial that you pay attention to how much you are spending each month.
Plan on Unexpected Expenses
Life happens and you can’t always plan. One thing you should plan for is unexpected expenses, like car repairs or doctor visits. You can do this by setting aside a small amount each month (e.g., $20) in an emergency fund using your checking account. Another way to help the unexpected is to set aside money each month in to a savings account. This can be used for unexpected things you may need, or want, such as trips or a going out to eat that you did not account for in your budget.
Once you have paid all of your bills and set aside this monthly emergency fund, you have reached the end of your spending plan for each month. The amount left over in your checking account is yours to do with as you see fit!
What if money is too tight?
In some situations, budgeting may be difficult and you may not have enough money. If this is the case, it’s important to figure things out as soon as possible – don’t wait until your bills become overdue!
If you need more income to cover expenses, look into getting a job or increasing your hours at work. If you have to cut spending, start with the things that are not as important such as eating out or shopping.
However, attending college is often a full-time job in and of itself. On top of that, it’s important for you as a student to have a healthy amount of free time and disposable income for entertainment and leisure in order to manage the stress of college.
If you have your basic budget under control but need a little leeway for leisure and unexpected expenses, there are plenty of credit cards designed specifically for college students that will help take the pressure off. Just make sure to do your research and compare cards before signing on!
At the end of the day, it can be easy to feel overwhelmed by the number of expenses you have as a college student. However, if you take an organized approach and write down each expense before it becomes due, managing your money should become much easier.
Colin Crown is a contributing writer and media specialist for Compare Credit. He is an avid foodie, marketing enthusiast and loves the city of Memphis.