One of the most important things every new college student should start doing during their first semester at college is budgeting. We know the word “budgeting” doesn’t sound exciting, but you’ll have a much happier experience in college if you plan and stay on top of your finances.
If you have never created a budget before, don’t let the process overwhelm you. At its most basic, budgeting really just means writing down your monthly income and fixed expenses so you can see how much money you have left over each month for savings and discretionary (read: fun) spending.
Here are six tips to help you with budgeting through your college years:
- Try to include all expenses. Beyond your share (if any) of tuition and fees, housing expenses, a cell phone bill, and a meal plan if you’re living on campus, make sure your budget also includes things like school supplies, toiletries, laundry, personal care (like haircuts), and parking.
- Include a “Misc” category. Because there will always be unexpected expenses that come up (car repairs, gift purchases, etc.), you’ll want to have a little bit of wiggle room in your budget to cover those things. A good rule of thumb is to take 5-10% of your other total expenditures for the miscellaneous expenses category.
- Balance “wants” with “needs.” When you’re listing your expenses on your monthly budget, be realistic about what you really need (food, laundry money, a haircut) and differentiate that from what you really want (that new pair of shoes or a weekend trip to see your favorite band perform live). Some college students find that a cash allowance helps them stay on track. Just don’t take out more cash during the month to spend on the “wants” if the allowance runs out.
- Build an emergency fund. Saving money while you are in college can seem like a tall order, but you’ll be surprised how quickly your savings adds up when you are consistent and deliberate about setting aside even a few dollars each week. Once your emergency fund is healthy, you can start saving for larger purchases like a down payment on a future home.
- Open a checking account. You’ll want to find a bank with convenient ATMs and online/mobile banking options. Then, be sure to stay on top of your balance regularly. Managing your checking account responsibly now will help build your credit rating, which will be important through college life and beyond.
- Get organized. Being organized with your finances can be tough in a small space like a dorm room or a first apartment, but doing so will help make sure you’re not missing any bills. Using your bank’s online bill pay option can help with this tremendously.
By starting to budget early on in college, you’ll be establishing sound financial habits that will serve you well for the rest of your life. To find out more about how Mercer Savings Bank‘s checking and savings products can help college students on the right financial path, contact us today.