Track Your Spending
People are notorious for underestimating how much money they spend. That's because we all spend small amounts of money here and there, and we don't really keep track of it. Movie tickets, coffee, sodas, fast food, gas, magazines, haircuts-all on top of bigger expenses such as tuition and car payments.
A tried-and-true method for tracking spending is the “spending notebook.” Be sure to account for every single penny you spend over the course of several weeks. You'll not only see where your money is going, but you can make decisions about whether all those purchases were wise or necessary.
Pay Major Bills First, Then Budget
It's easier to plan a budget after first setting aside money for your tuition, books, student fees, meal tickets, and other large annual or semiannual costs. Once these are subtracted from your bank balance, you'll have a more accurate starting point from which to plan a budget for the rest of the semester.
Create a Spending Plan
Once you identify your spending habits through a spending notebook and knock out significant expenses such as tuition, you can get started on creating a budget, also known as a spending plan. Since "budget" can sound restrictive, you might prefer to use "spending plan" as a purposeful map for how to spend your money. You can either use the worksheets referenced below, or click the Interactive Budget Wizard on the tab above.
- Identify income: List the financial assistance paid directly to you each month, family help, anticipated job income, Work-Study income, child support payments, food stamps and any other sources of money you receive.
- List your expenses: Using your spending notebook and any receipts you've saved, determine what your actual expenses are. As you write down expenses, you will probably start to see areas of unnecessary spending and opportunities to cut back.
- Compare income with expenses: Once you've identified your income and expenses, you need to compare them to see how you're doing.
- Make adjustments: If your income is higher than your expenses, great! Not only are you preventing financial stress, but you can set some money aside for your goals—a new laptop, a spring break trip, emergency savings, and more. If your expenses are higher than your income, you have two options:
- Cut expenses. See Identifying needs vs. wants.
- Increase income. Increasing income can be difficult in college with limited time on your hands, but you might think about what you can do.