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In a lot of ways, going to college is one of the first major steps toward independence. For the first time, you’re living away from home, you’re learning how to juggle financial responsibilities, and, of course, you’re poor. Beer and poverty may seem like two staples of the college experience, but, believe it or not, the latter is not a foregone conclusion. Learning how to budget in college can help you live comfortably during your undergraduate years, and the skills you learn now will prove invaluable even after you graduate. In this post, we’ll give you a crash course on how to create a workable college budget.
A budget without goals is like a journey without a destination. Before you embark upon creating your college budget, think about your short-term, intermediate, and long-term goals. Establishing goals will give you an incentive to stick to your budget and help you stay focused. Examples of short-term goals might be to save enough for textbooks for next semester or to pay off one credit card. An intermediate goal might be to save for a down payment on a car or a spring break trip next year. Long-term goals might include saving to buy a house later on or saving to pay for graduate school.
Once your goals are established, your next step is to keep track of everything you earn and spend for at least 30 days. Ideally, you should do this for a few months for maximum accuracy. Write down every source of income you earn, including wages, grants, scholarships, student loans, and any other income. Next, write down everything you spend, down to the last penny, for 30 days. You might keep receipts and do this on your computer with a budgeting program or you could go with old reliable—toting a notebook around and noting what you spend.
After your tracking period is over, add up all of your income and do the same for your expenses. Compare your total monthly expenses with your total earnings. If your expenses exceed your income, you’ve got some work to do. Even if your earnings just slightly exceed your expenses, you might want to make some adjustments to give yourself more of a financial cushion. Categorize your expenses and identify areas where you can potentially cut back. Alternatively, you can also identify ways to increase your income, such as applying for additional scholarships or getting a part-time job.
