As the college semester begins, many students will start with a new budget based on their anticipated college expenses. Perhaps they have estimated the tuition, room and board, books, groceries, and transportation costs to and from college. However, there are many other small expenses that most students fail to factor into their calculations. By the time a student realizes the total of these extra small expenses, it is too late; their account is depleted halfway through the semester.
As a college student, avoiding a financial crisis halfway through the semester is relatively easy as long as you are tracking your finances throughout the academic year. Prior to classes starting, establish a thorough financial plan for all the expenses that you anticipate that you will incur throughout the semester. Each month, review your financial progress and, as necessary, make required financial adjustments.
Start With the Full Cost of the Semester
Tuition is only one part of the cost of attending college. Students also need to account for rent, utilities, groceries, transportation, textbooks, software, lab fees, personal expenses, and emergencies. Some of these costs are easy to overlook because they do not appear on the initial tuition bill.
Once you have listed all expected semester expenses, add them together and compare the total with the funding you currently have available. Include any money you are still waiting to receive, along with contributions from parents or other family members. Scholarships, grants, work-study income, federal financial aid, and personal savings should all be accounted for first. If a funding gap remains, you may consider researching private loans for students as an additional option. Compare interest rates, fees, repayment terms, and cosigner requirements before making a decision, and borrow only the amount needed to cover the remaining shortfall.
Break the Budget Into Monthly Limits
If the student divides the funds allocated for that semester by the number of months they will be in school, for example, by dividing the total available by 6 for a semester-long school year, then that will give the student an exact amount for each month, thereby making it so that the student can have a better idea of exactly how much is available to be spent each month and thereby avoiding the problem of most of the money being spent in the first month or two of the semester.
If your list of semester expenses includes any fixed rate charges, such as rent or a phone bill, make sure you are reserving money in your semester fund for these before determining how much you can afford to spend on variable rate expenses like food, leisure time, and shopping. Once you have accounted for the costs that remain the same from week to week, you can split up the rest of your money and bring it with you to college every week.
Forcing oneself to set aside a portion of the total semester funds each month for non-fixed expenses will help one see how much they can afford to spend per week or month on non-essential items during the semester.
Watch the Small Recurring Expenses
While large, singular purchases might rack up a bill quickly, they’re much easier to notice and prepare for than a handful of single purchases made regularly that each don’t cost too much on their own. The coffee, deliveries, movies, rides, convenience items, and other items on this list can add up to hundreds of dollars over a semester for students with busy schedules, particularly those who work outside of class as well. But before throwing up your hands and pulling out your wallet to pay for everything, take a look at the recurring and one-time purchases in your spending records from the past few months to get a sense of how much money is going out each month or from time to time.
Reviewing your bank and credit card transactions weekly can help you identify spending patterns before they cost you too much. You don’t have to cut out every nonessential spending from your life. You can still spend money on things that enhance your college experience and also on things that are just a habit. It is up to you to decide.
Prepare for Irregular Costs
Not all expenses occur monthly. Students can budget for travel to and from home for holiday breaks, for instance. Students may also need to purchase a replacement laptop charger, buy professional clothing for interviews, or pay for an unexpected medical expense.
By putting aside a small amount at the beginning of the semester for emergencies and withholding a portion of your budget until the end of the semester, you can save yourself from having to pull out the credit card to pay for an unexpected expense.
Adjust Before the Money Runs Out
Your budget does not have to be set in stone either. Your budget should help you reach your goals; if it is no longer helping you do so, then it is time to make some changes. For example, you may find that you have been spending much more money than you anticipated, in which case you could cut back on eating out by cooking more meals. You could also look at ways to reduce the cost of your books, perhaps by buying second-hand rather than new. Another idea is to use campus transportation instead of driving everywhere.
Changing one or two things might not have a huge impact on your budget in the grand scheme, but when you look at the overall issues, these kinds of changes could make all the difference in the world. Plus, making these types of changes is easier to deal with than making drastic changes when you are in dire straits trying to come up with the money for books before the semester starts.
Your goal is to have sufficient funds to make it through the entire semester. There will be times when you want to spend money. If you have sufficient funds at the beginning of the semester, then you can decide whether or not you want to spend them.
