As a college student, developing a budget can help you reduce debt and save for the future while still enjoying college life! But if you’ve never managed your own money before, it can be hard to know where to start.
Here’s an easy, 5-step guide to building your first budget plan:
Step 1: Add up your monthly income. For many, income means your salary – but students should also include things like scholarships, grants, or financial aid.
Step 2: Calculate all of your fixed monthly expenses – like your tuition, dorm or apartment rent, textbooks, meal plan costs, subscriptions, etc.
By subtracting your expected expenses from your income, you have a better idea of what kind of extra money you’re working with each month.
Step 3: Use your list to identify any unnecessary costs you could cut. Maybe you have subscription services you no longer use, or you could find a cheaper meal plan. By cutting back just a little each month, the savings can really add up!
Step 4: Now, you can set some specific financial goals! Maybe you want to put a certain amount into savings every month, or aim to have enough cash saved up to do a few fun activities with your friends.
Step 5: Choose a strategy for achieving those goals. One example is the Envelope Method, where you withdraw your allotted spending money from the bank in cash each month and place it in envelopes corresponding with your spending categories. Once an envelope is empty, that spending for the month is complete.
Different people use different methods – search the web to find the one that works for you!
Helpful Tip: You don’t have to keep track of all your spending yourself! There are all kinds of budgeting apps or websites that can help – and your financial institution may already have a solution to help you get started.