Students receive large sums of money to facilitate their stay in college. Planning a budget and sticking to it is necessary for students if they don’t want to find themselves struggling or in debt as the semester ends. Below are ten simple things that students can do to help them plan their budget.
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Determine your previous spending pattern
Look through bank statements, bills, receipts, credit cards to determine where your cash has been going. This will give you an estimate of the amount you are likely to need. It is also a good opportunity to determine if you have been making wise choices.
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Determine your total income
Add up all your sources of income, like student loans, pocket money from parents, gifts, earnings from employment and investments. It is important to know how much you have before drawing up a budget. Do not however draw up a budget based on uncertain income like a promise or expected employment. It is better to draw another budget when you get the money.
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Give priority to essentials
Identify those things that are essential and budget for them first. Put money aside to cater for food, rent, bills and travelling expenses for the whole semester or term. You can then allocate what remains for non-essentials and luxuries but also put some money aside as savings.
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Make a realistic budget
A good budget should always have the income higher than expenses. Do not make a budget that you cannot stick to because you are hoping to spend less. The main aim of a budget is to help you live within your means not prevent you from being comfortable.
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Add savings as an expense
Teach yourself to put something aside for rainy days. When savings is an expense, you have no choice but to pay for it.
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Miscellaneous
Add a miscellaneous category to your budget. Miscellaneous is calculated as ten percent of the total expenses. It prevents you from having to draw another budget if you forgot an important expense providing flexibility to the budget.
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Align your budget to a goal
What is it that you expect the budget to do for you? Do you want to cut on spending, save more or offset a loan? It is easier to plan for and adhere to a budget that is aligned to a goal. Make frequent reviews (weekly or monthly) to determine if you meeting the goal
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Track your spending
Keep a spending diary where you record everything you pay for whether using cash, debit card or credit card. Evaluate at the end of the day if you are within budget or not. Make adjustments if the spending is out of budget also decide what to do with extra money if you are under spending. There are also online tools that help with tracking ones spending.
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Ask for help
Speak to someone for help if you believe you are in financial difficulty that you cannot come out of by yourself. Ask your parent, relative or friend for help, some colleges have student welfare officers that can help too. By all means do not ignore the problem.
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Get a bank account that can control your spending
Many banks offer accounts tailor made for students. These accounts have lower charges and tools that can help students manage their money better like a text alert when the minimum limit is reached.
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