The concept of saving money while in college may be intimidating or overwhelming. To help make it a little easier, just make sure that you have the right mindset before even starting to save. It’s unlikely that you’re going to get an amazing-paying job right after graduating college or university; if anything, most jobs will require experience. If nothing else, though, budgeting your money now will make things a whole lot easier in the future!

Budgeting Advice for College Students

Calculate your net income

You might be taking a part-time job or an internship while in college to help pay for your education and cover living expenses. Additionally, you can receive money from loans, grants, scholarships, or a monthly allowance from your parents. Your monthly income is a crucial component of your budget since it establishes the ceiling on how much you can spend.

You should figure out your net income, which is the amount of money you make after taxes, before starting to create a budget. Regardless of whether you work full- or part-time, if you receive a monthly paycheck from your company, the sum that is put into your bank account is your net income.

Try to determine an average amount that you can typically count on each month if you are an hourly worker whose hours vary from week to week and month to month. Choose a lower amount so you don’t run the risk of going over budget.

In order to avoid being caught off guard by a hefty tax payment at the end of the year, you should deduct taxes from your salary and store them in a separate account if you make a living as a freelancer. You can estimate your yearly tax obligation using the TaxAct calculator, then divide that figure by 12 to obtain an estimation of your monthly tax obligation.

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List monthly expenses

As a college student, you’re probably trying to figure out how to pay for the things that you need to get by. You want to make sure that you’ve got enough money for food, textbooks, and other essentials. But how much do those things cost?

To help keep you on track with your monthly budget, we’ve put together a list of some common expenses that college students might face. This will give you an idea of what kind of funds you’ll need in order to stay on top of your bills while in school.

The first thing to consider is the cost of food. If your campus is close by, it might be tempting to eat all your meals there—but this can get expensive fast! If possible, try cooking at home or bringing lunch from home instead. And if neither option is viable for whatever reason, look into meal plans offered by your university or local grocery stores that offer discounts on food purchases made with their cards.

Another important expense is books and other course materials; unfortunately these are usually required in order to pass classes so they’re not optional expenses like food is (unless you have a very lenient professor). The good news is that most colleges have bookstores where textbooks can be.

Organize your expenses into fixed and variable categories

Budgeting is a great way to make sure that you have enough money to cover all of your expenses, and it can also help you to be more aware of how much money you’re spending.

It’s important to organize your expenses into fixed and variable categories. Fixed expenses are things like rent, utilities, and car insurance. Variable expenses are things like food or entertainment that change from month to month depending on how much money you have available.

It’s important to remember that some things might be considered fixed for one person but variable for another—for example, it may be fixed for someone who lives alone and has no roommates but variable for someone who lives with roommates or family members who share the cost.

As a college student, you’re probably trying to figure out how to pay for the things that you need to get by. You want to make sure that you’ve got enough money for food, textbooks, and other essentials. But how much do those things cost?

To help keep you on track with your monthly budget, we’ve put together a list of some common expenses that college students might face. This will give you an idea of what kind of funds you’ll need in order to stay on top of your bills while in school.

The first thing to consider is the cost of food. If your campus is close by, it might be tempting to eat all your meals there—but this can get expensive fast! If possible, try cooking at home or bringing lunch from home instead. And if neither option is viable for whatever reason, look into meal plans offered by your university or local grocery stores that offer discounts on food purchases made with their cards.

Another important expense is books and other course materials; unfortunately these are usually required in order to pass classes so they’re not optional expenses like food is (unless you have a very lenient professor).

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Determine the average monthly cost for each expense

List your monthly spending for each expense once you have distinguished between fixed and variable costs. To determine the amount, use your bank and credit card statements.

It is simple to put a dollar value on the cost of many fixed expenses you incur because they often remain constant from month to month. For instance, your monthly expenses for rent or room and board, a food plan, insurance, and phone service are probably going to be the same. Some variable costs, like your gym subscription, could also have a defined monthly cost.

Some fixed and variable costs, however, are not predetermined. Renting an independent apartment away from school means paying for utilities like gas and electric, which can change from month to month. The same holds true for household products, takeout, and groceries.

You’ll need to use math to establish the average monthly cost for any categories where your spending varies from month to month. The math is rather easy to understand: Divide by three the total amount spent over the course of three months on an expense. You might wish to increase the sum by five or ten percent. You might wish to set the spending cap at $125 or $130 if your three-month average grocery expenditure is $123.

Make adjustments

Making sure the numbers add up requires comparing all the data you acquired during the budgeting process. See if you have enough money coming in each month to pay all of your bills by comparing your net income to your monthly spending.

It’s time to change your lifestyle if you can’t afford it. In addition to thinking about strategies to increase your income, such as working more hours, you should also examine ways to reduce your expenses.

This can entail spending less on varying costs, including restricting takeout orders and canceling subscriptions to streaming services you don’t use frequently. Additionally, you might want to modify some fixed expenses to account for rising costs. To save more money when you shop for groceries, clip digital coupons ahead of time and choose store brands over name-brand products. Find a new place to live that has lower rent if you’re looking to relocate.

Get a job

Obviously, college should be enjoyable. Enjoying your first taste of independence is important, and the social components of college are almost as important as the academic ones. However, if you can, adding a part-time employment to the mix can greatly aid in managing a budget. It’s not an uncommon difficulty because 40% of students reportedly work while attending school. In order to accommodate students, many college jobs have flexible schedules; therefore, try to locate something that will fit into your workload without overtaxing you. The ability to manage a budget greatly benefits from having that extra money. You can set up KOHO to swiftly receive direct deposit cash, ensuring that you always have access to your money.

Pay off high-interest debt first

Living on a budget can have some particularly pernicious side effects, such as credit card debt accumulation. Additionally, holding onto high-interest debt for too long can be financially disastrous because it will rise at a faster rate than other debt. It can also gradually lower your credit score, which is a snowball effect nobody wants. You already have student loan debt, therefore it will benefit you in the long term to make payments on the debt with higher interest rates first.

In addition to managing your credit card payments, you can set up KOHO to automatically monitor and deduct payments for your other expenses. Increase or treble payments on high-interest debt if you can to pay it off as fast and completely as you can and prevent it from rising.

Shop deals and use coupons

Although using coupons is not the coolest thing ever, it is undoubtedly cooler than spending full price for something you could purchase for less. When you shop regularly, keep an eye out for sales at the stores. When looking for discounts, KOHO gives extra cash back with a number of renowned businesses around Canada, which is a wonderful place to start. A little amount of effort in your price comparison research could end up saving you a lot of money over time. The money you save each month can really mount up over time, especially if you incorporate deal searching into your regular purchasing habit.

Keep an eye on student discounts

Take advantage of the numerous discounts, specials, and special rates that are available to students. Examine whether a student ID or email is a valid method of payment while you’re making a decision about a product or service. Since you’re already paying for school, you might as well benefit financially from it.

Use financial apps

Nowadays, apps are accessible for almost anything, so it stands to reason that there are a ton of personal finance applications available to assist you in maintaining a strict budget by keeping track of your spending. Utilize apps like Mint to keep tabs on your overall spending in relation to your income. Or you could use KOHO, which has a RoundUp feature that saves aside spare change to be saved for later and not only offers extensive categorization of your spending habits to more fully track your budgeting. You need a location to begin. Enter your email at the bottom of this post to try our comprehensive budget template!

Take Classes at a Community College

You can save a significant amount of money by enrolling in classes at a community college, whether you’re supplementing your four-year university education and possibly cutting some time off your college career by graduating earlier than scheduled, or attending a local college as a four-year university replacement.

Universities and colleges sometimes enter into arrangements with nearby community institutions to allow for the transfer of credits, according to Sherin. “See what’s offered at the other school if it makes sense for your schedule and your budget.”

Look For Free Events

Take advantage of the numerous free events offered by colleges and institutions to save money, Sherin recommended. You will spend more money out on the town, Sherin said, even though going to the neighborhood pub or nightclub might sound more attractive than a free school event. Sherin added that attending campus events is a fantastic opportunity to make new acquaintances.

Money Management Tips for High School Students

Creating a budget

Setting up a budget is an excellent way to start managing your money. Budgeting can be taught to high school students long before they need to separate their finances from yours.

You may, for instance, work with them on a budgeting exercise. Help them set aside their allowance for specific purposes, such as paying for a night out with friends, setting aside money for a purchase, etc. Or you may give your child a loan for a significant item while charging interest to help them understand the cost of borrowing. Even though they are simple, these activities can get your kid thinking about money decisions and the trade-offs they have.

You can then have more educated discussions regarding actual money issues after they feel comfortable with the concept of budgeting. For instance, if your high school student intends to attend college, make a college budget that accounts for their educational costs. If they intend to work, assist them in calculating the expense of independent living. Show them how much they must set aside for an apartment deposit. Budgeting will also be required for costs like utilities, clothing, food, and entertainment.

Be truthful about your expenditures; you might be surprised by the results. Sometimes we need a wake-up call to stop wasting money, and seeing things in black and white might provide that. Do you enjoy shopping for the newest kinds of clothing? You might need to limit the amount you spend on a single shopping trip. You can (and should!) carry on with this behavior long into adulthood. Just add more columns to your spreadsheet or line items to your app, calculate your monthly spending on each item, and attempt to maintain that level or less each month.

Open a checking account

An excellent method to develop sound money management skills is by opening a checking account. Almost all banks provide online banking, allowing you to conveniently keep track of your spending and even make deposits using a mobile device. Debit and/or credit cards are typically available from financial institutions. Despite being convenient (because purchases are immediately taken from your account), it’s simple to overspend. Keep a careful eye on your finances and keep your expenditures to a minimum compared to the balance of your checking account.

Identifying and prioritizing spending

To reach financial objectives, just making a budget is not sufficient, and maintaining it is also not simple. It’s crucial to discuss expense prioritization with your adolescent. To assist students in categorizing their spending, explain the distinction between necessities for needs and wants and non-necessities.

A different strategy is to make financial goals. You may help your high school student set short-term objectives like putting money down for a down payment on a car or a deposit for their first apartment. Encourage them to save money for those objectives after that.

In an email to The Balance, David Haase, a private financial planner with New Jersey-based retirement planning firm RPT Wealth Strategies, said, “Reviewing spending may be a worthwhile process, and you may be pleasantly surprised as your [kid] achieves more independence and maturity.”

Building their credit

At this point in their lives, your teen has to start building credit. They can achieve this by making timely payments on a car loan or an apartment lease. They could use a credit card as a means of improving their credit, but if they simply run up a balance, they risk doing more long-term damage than good. Make sure your high school student understands that paying off their amount in full and on time each month is a crucial component of building good credit.

Children under the age of 18 are not eligible to apply for credit cards at all, and if your child is under 21, they will need to provide proof of their financial responsibility. 3 Parents can accomplish this by adding their kids as authorized users on their cards. In fact, a number of professionals advise making that choice.

Jan G. Valecka, a Certified Financial Planner with a practice in Dallas, Texas, added her college-bound kids as authorized users on her credit card with a monthly spending cap.

“They may use the card, build their own FICO credit score, be paid, and have a budgeting conversation with us. If they misplace their card, the limit shields us. I compare what they have spent to their allocated amount and show them the bill. It works really well, “In an email to The Balance, Valecka stated.

Establishing an emergency fund

Your youngster will encounter costs that they may not anticipate, such as auto repairs and hospital fees. As their parent, you might be willing to contribute to these costs right now, but eventually, they will be your responsibility.

They can relieve strain and prepare for the unexpected with the aid of an emergency fund. You might advise them to start by setting aside one or two months’ worth of income. Then, as they work toward achieving other financial objectives, they might gradually increase to a year’s income.

Share with the student that they must set aside some money (at least 10%) from each pay period into a savings account for emergencies if they have a part-time job, said Haase.

He did, however, add a warning for the parents as well. “I’ll let you decide whether or not this is an actual emergency. A midnight pizza is typically not an emergency, “explained Haase.

Take advantage of deals

It can be tempting to purchase the best of the best in order to keep up with your friends and other students, but there are instances when it pays to search around for a better price on particular things. On everything from apparel to shoes to electronics, stores and retail websites have fantastic end-of-season deals, while websites like Groupon provide discounts all year long. Additionally, you might want to try browser add-ons like Honey, which will automatically search the web for the greatest coupon for any online retailer. Make the decision to limit your spending and live within your means if you want to stick to the budget you’ve made.

Conclusion

The concept of saving money while in college may be intimidating or overwhelming. To help make it a little easier, just make sure that you have the right mindset before even starting to save. It’s unlikely that you’re going to get an amazing-paying job right after graduating college or university; if anything, most jobs will require experience. If nothing else, though, budgeting your money now will make things a whole lot easier in the future!

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