Budgeting for College Students: Living on a Shoe String

Budgeting for college students applies to you if are planning to attend or are already in college. The sooner you start the habit of creating and sticking to a budget, the sooner you will be financially independent. And isn't that the inevitable goal of everyone that is in the pursuit of a higher education?

As we discussed in the preceding section, College Student Money Management, you have unique financial needs as a college student. You may be living on your own for the first time in your life. It is both exciting and scary at times. I know. I have done it.

You are in a great position now to make some equally great decisions that will impact your financial future. Budgeting for college students is all about learning to live within your means. It could be as important as earning your degree. So let's get started figuring all of this out.

Obviously, your situation is going to be different from the next person's. As a starting point then, budgeting for college students assumes that you have some money to budget in the first place. You probably have money that is sent to you on a regular basis by your parents, receive a stipend from your school, or have a job that pays.

The biggest expenses you have are probably in the area of housing. There is just no way to get around needing a place to live. You have a lot of choices here, no matter where you are geographically. Try to think creatively about this. There is no sense living in a place that you really can't afford so that at some point you have to move out because you run out of money.

One of the best places I lived while I was in college was in the basement of some relatives of a friend. I paid very little in rent and I could eat with the family whenever I wanted at no extra charge. It was a win-win set-up. The family didn't need the extra space and got to make a little money. I got a dirt cheap place to live complete with my own bathroom.

Utilities are another big chunk of change. As you are interviewing prospective landlords, you will need to take this into consideration. If you are looking into student contract housing, oftentimes your utilities will be included in your monthly payment already. Watch out for these, though, because sometimes if you go over by a certain level of consumption you will be charged with the difference. Oftentimes you can get a better deal elsewhere.

Then there is food. The simpler your diet, the further your college student budget will stretch. And the healthier you will be, consequently. If you can live on cracked wheat cereal and lentil soup, you will have an easier time making ends meet.

Of course, you will invariably have a roommate with whom to share expenses, which I highly recommend.

Using the following sample budget for college students will help you to figure out how much money you have, and how much you spend. You will probably need to chart your expenses for a couple of months to get a realistic picture of your spending needs and habits.

It is time to get out your pen and paper. For each category, write down the amount budgeted and the actual amount received or spent:

Budgeting for College Students Sample Budget

Income
Family Contribution
Grants
Scholarships
Income From a Job
Student Loans
Other
TOTAL

College Expenses
Tuition
Fees
Books
Supplies
TOTAL

Living Expenses
Rent
Utilities
Phone
Food
Car
Gas
Entertainment
Clothing
Laundry
Insurance
Credit Card Payments
Other Expenses
TOTAL

The other advantage to working with a sample budget is that it will help you see how to take every expenditure and source of income into consideration.

If, after filling in the college student budget with your own figures, you find that you are spending less than you are bringing in, you will be able to start putting away some savings right away. However, if you have more expenses than money to cover them, you will either have to cut back or find another income source.

Cutting back is easy to do if you are willing to admit that you cannot necessarily afford the same lifestyle as your parents enjoy. For one thing, your clothes do not have to be brand new. New clothes look the same after a few times being washed as they do hanging on the rack in a second hand store.

Also, you can save a ton in gas if you carpool--not just to work and school, but also home for the holidays. Be sure to check out the message boards to see if someone is headed your way.

Instead of renting DVDs from the store, check them out from the library for free instead. Often they will have a good selection and may even let you place a hold on a new title. Libraries love to receive requests for books and videos. Sometimes they require a dollar donation, but it is worth it to be able to read or watch something for a fraction of the cost.

We already talked about credit cards, but I will say it again: If you can avoid getting one, do yourself a favor and wait. If you must have one, live by the rule that you will never purchase anything with it that you cannot afford to pay cash for--then pay off the entire amount the instant the bill arrives. It will be a lot easier to stick to your college budget if you do. Besides, you don't want to have to worry about the extra debt load right out of college.

Of course, there are some less than conventional ways of paying for college that will really help you stretch your budget.

For instance, you could start out at a less expensive community college and then transfer after you have your general ed. out of the way. Then, transfer to a more prestigious college or university to earn the rest of your degree.

You might also want to consider attending a tuition-free college. There are several of these out there that require you to work in exchange for paying your tuition, but it it usually worth the extra effort.

Tuition-free colleges include The Cooper Union in New York, N.Y.; Webb Institute in Glen Cove, N.Y.; Berea College in Berea, Ky.; College of the Ozarks in Point Lookout, Mo.; and Alice Lloyd College in Pippa Passes, Ky.

If you do have to rely on loans to finance your college budget, try to stick with federal student loan programs. You will find that their interest rates are much lower than those of private lenders. Also, with federal programs, you may be able to work off your student loan debt through community service after graduation.

No matter how you are able to manage the cost of your education, budgeting while you are a college student is the way to go. You do not want to be up to your ears in debt later on just because you did not learn these lessons now.

Return from Budgeting for College Students to College Student Money Management