Budget advice for students

There are many ways to create a budget, including using a budgeting app that connects to your bank accounts or creating a spreadsheet with an online template.

Whichever resource you choose, remember to stick with it and hold yourself accountable to achieve your financial goals.

Here’s how to create a budget as a student.

Calculate your net income

While in college, you can take on a part-time job or an internship to help pay for your education and pay for living expenses. You may also have income from grants, scholarships, loans, or a monthly allowance from your parents.

The amount of money you bring in each month is an essential part of your budget and forms the basis of what you can afford to spend.

As a first step in creating your budget, you’ll want to calculate your net income, which is the amount of money you earn minus taxes.

If you receive a regular paycheck through your employer, whether you are part-time or full-time, the amount deposited into your checking account is your net income.

List monthly expenses

Next, you’ll want to list all of your monthly expenses. Here are some common college-related expenses: whether it’s school supplies (like textbooks and electronics), rent, groceries, transportation, and more. It’s helpful to include savings so you don’t forget to put money aside for future goals.

Organize your expenses into fixed and variable categories

After listing your monthly expenses, it’s time to categorize which are fixed and which are variable. Fixed expenses are bills that you generally cannot avoid and must pay, including textbooks, rent/room and board, groceries, transportation, insurance, and debt repayment.

Variable expenses are more flexible and often include wants, such as a gym membership, travel, dining out, and entertainment purchases.

Determine the average monthly cost for each expense

Once you have labeled fixed and variable expenses, indicate how much you spend on each expense per month. Refer to your bank and credit card statements for the amount.

Many fixed expenses you incur will generally be the same from month to month, making it easy to assign a dollar amount to the cost.

For example, your rent/room and board, meal plan, insurance, and phone bills will likely cost the same each month. Some variable expenses may also have a fixed cost each month, such as your gym membership.

Make adjustments

The final step in your budgeting process is to compare all the information you’ve gathered and make sure the numbers work. Compare your net income to your monthly expenses and see if you have enough money each month to cover all your expenses.

If you can’t afford your lifestyle, it’s time to make adjustments. While you can consider ways to make more money, like taking more hours at work, you should also think about ways to cut costs.

If you are looking to move, find an apartment with a cheaper rent. And if you have money left over after creating your budget, consider spending it on any outstanding debt, like a lingering credit card balance, or use it to start saving it for the future.

Next steps

Now that you’ve worked hard and finished creating a budget, it’s important to stick to it.

Tracking your budget while in college can help you pay off debt and graduate with strong financial habits that can help you reach your long-term life goals.

To stay on track, keep yourself accountable by setting reminders to log expenses into your budget every day. If you decide to use a budgeting app, set alerts when you approach your spending limit for different spending categories.

You can also set up transaction alerts with your bank or credit union that will notify you if you’re approaching a pre-determined spending limit.

If ever there is a change in your income or an expense, be sure to adjust your budget accordingly to avoid any mishaps.— TeenKidsNews

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