5 Tips for Budgeting in College

Even if you intend to take as few math courses as possible at a university, you really can’t get away from it: Budgeting in college is like one of those math word problems come to life.

If you’re starting the next rung of higher education soon, you’ll want to start thinking about how you’re going to make your money last through the semester or year. Or if you have college-bound kids, you’ll want to offer them these budgeting tips:

  • Use a spreadsheet.
  • Make a comprehensive list of monthly expenses.
  • Don’t be overly optimistic with your budget.
  • Think beyond college textbooks.
  • Avoid fast food.

Use a Spreadsheet

Sure, you can go old school with a pad of paper and a pen, or type up your budget in a Word document. But you can’t go wrong with a budgeting spreadsheet. Debika Sihi, an associate professor of business at Southwestern University in Georgetown, Texas, recommends Excel or Google Sheets.

“Actually seeing different line items like rent, tuition, favorite sandwich shop, car insurance payment – favorite sandwich shop again – is useful to understand spending in different areas of a student’s life,” Sihi says.

She says that with a spreadsheet, you can easily update it with “a pay raise or an increase in rent.” Plus, being able to look at the big picture “allows a student to identify trade-offs that may be necessary among the different spending categories,” Sihi says.

It’s worth a shot, at any rate. It takes some time to create a budget and to stick to it, but it’ll teach you good money management habits, Sihi says.

“I have students who have been successful in paying off student loans just a few years after graduating from college or saved enough of their income to put toward the launch of their own business,” she says.

Make a Comprehensive List of Monthly Expenses

This should be a long list – if it’s short, you’re probably missing some expenses. Hirsch Serman, founder of Lifecycle Financial LLC, a financial coach and certified public accountant in Chicago, offers the following examples to figure into monthly expenses:

  • Housing. If opting for off-campus housing, factor in monthly rent and utilities.
  • Textbooks. Serman recommends renting college textbooks. Students may rent by the month or for an entire semester, depending on the service.
  • School supplies. This could include everything from calendars and organizers to pens, highlighters and workspace supplies.
  • Transportation. Factor in gas, bus fare and costs for ride-sharing apps.
  • Meals and groceries outside of a campus meal plan. If living in the dorm, be sure to factor in snacks and restaurant meals. If off campus, create a grocery budget.
  • Entertainment and activities. This could include membership fees, movies, concerts and so on.
  • Coffee money. Grabbing coffee with friends is a social event, Serman says, “and a conversation on how to handle this on the cheap is important,” he adds.
  • Clothes. Depending on how often a student purchases new clothes, this may be in a monthly budget.
  • Internet, phone, cable or streaming services. This might include a student’s monthly cellphone plan.

Bedding and other items for the dorm or apartment may need to be on your list of expected expenses, Serman says, although those are probably not going to be monthly costs.

Don’t Be Overly Optimistic With Your Budget

Valerie Clem-Brown, director of financial aid at William Peace University in Raleigh, North Carolina, says the most common errors students make when budgeting are underestimating expenses and not budgeting for variances.

“When a student is trying to decide if they want to live on campus or off campus, they often create a budget that is stiff and doesn’t allow for monthly variations,” Clem-Brown says. “Whether it is an electric bill that will fluctuate depending on the season or gas to get to and from school, students often do not plan for costs to change over the nine to 12 months they are budgeting for.”

In other words, students need to be less optimistic that they can get by on the lowest amount. Clem-Brown says she sees that a lot.

“For instance, when budgeting for groceries, I had a student tell me that it only costs a couple of dollars to make a pot of pasta that they could eat on that for a couple of days,” she says. “While that is true, it is not feasible – and definitely not healthy – to plan a grocery budget around the absolute cheapest possible options.”

Clem-Brown also suggests students plan for something to go wrong in their budget.

“A month of below-average temperatures in the winter can substantially change an electric bill and potentially throw a wrench into a carefully crafted budget,” she says.

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