Tips on Balancing Your Budget in College
By: Olivia Frasca
Navigating the world of personal finance while managing schoolwork and other responsibilities are not taught in your typical college class. While tuition makes up a significant portion of a student’s costs, other essentials such as textbooks, transportation, and food are a challenge to handle.
Students find themselves pursuing a degree to further their future and earning potential. The road to that degree is not only time consuming, but a major financial commitment.
With a few tips, you can alleviate these mounting costs and become financially savvy, during and even after college.
Develop healthy saving habits by creating a budget. To start, write down your monthly income and categorize your spending.
This allows you to see where your money is going — and where it is not.
If you’re just starting out and are unsure about how to allocate your expenses, use the 50/30/20 rule as a guide. Spend 50% of your income on needs, 30% on wants, and 20% on savings or debt.
Budgeting, however, is not a one size fits all task. Adjust these percentages to fit your financial needs.
Creating a budget book can help you identify unnecessary costs and improve your spending overall. Start with small budget goals, such as spending less on takeout, and work your way up to long-term goals.
You can easily create a budget book in a notebook or on the computer using a spreadsheet. There are even budgeting apps that will do the calculations for you, such as Mint.
“Users can add their own categories, track bills, split transactions and set budgets that alert them when they’re exceeding their maximum spending threshold. The service also provides free credit scores and credit score monitoring,” according to a nerdwallet review of Mint.
As soon as you receive a class syllabus, look up affordable textbook options. Avoid paying full-price for materials you’ll only use for a semester.
Amazon and Chegg are popular websites that offer cheap textbooks and e-books for rent.
Take advantage of online websites, such as UNiDAYS and RetailMeNot, that give student discounts at select stores.
Spotify offers a student discount that allows you to use their streaming service and Hulu for $4.99/month, $5 less than the monthly standard subscription that only includes Spotify.
Ordering food won’t empty your stomach, but it will empty those pockets. You’d be surprised at how much money you can save just by cooking and deleting those food delivery apps.
Instead of throwing away old clothes and items, sell them. Buy and sell from your phone using apps like Poshmark and Depop. You can declutter and make a few extra bucks with little effort.
Budgeting is not the only way to manage your personal finances. It’s important to build your credit at a young age, too.
Getting approved for a credit card is difficult as a full-time student. Luckily, there are credit cards designed for those attending college.
Discover credit cards, for instance, offer great incentives for students. They have no annual fee, issue yearly statements if you maintain a GPA above a 3.0, and offer cash-back on most purchases.
You can also take your savings to the next level by using a high-yield savings account.
“High-yield savings accounts are a type of savings account, complete with FDIC protection, which earn a higher interest rate than a standard savings account. The reason that it earns more money is that it usually requires a larger initial deposit, and access to the account is limited,” mentions Investopedia.
Some banks offer high-yield savings accounts with an annual percentage yield as high as 2%. Research banks to see what type of account is best for you.
College expenses can become a burden, but following these tips can lighten the load and prepare you for future investments.