Budgeting can be complicated and many college students are making their financial decisions all on their own. It’s a bit scary and difficult. It’s already hard balancing classes, homework, studying, a job, a relationship, and other responsibilities. Add in trying to figure out the cost of tuition, living expenses, and recreational spending can be overwhelming. Especially, when you’re on a limited budget.
Budgeting is so important because it not only shows you where your money is going but it helps you save money.
Every student’s situation is different but these 5 college budgeting tips will help you start budgeting immediately and have you working toward achieving all your financial goals.
1. Generate An Income
To create a budget, you need an income. You might already have a primary source of income from a job, scholarship, student loan, or a family member. However, I want you to maximize your income. I don’t want you to have to take out student loans. I want you to graduate debt free or better yet with a little nest egg. The best way to do this is through multiple sources of income.
If you don’t have a job, get one. If you have a job, I want you to start a side hustle. Side hustles are flexible and can fit into any student’s schedule. They are a great way to avoid debt, increase your wealth, and become financially independent.
Side Hustles For College Students
A side hustle can be anything, baby, house, or pet sitting. Uber or Lyft driving. Delivering food, groceries, or office supplies with DoorDash, Uber Eats, Postmates, Grubhub, or Instacart. When I was in college, a fellow student bought a scooter and delivered food from the hours of 10 pm to 2 am and he made more money from that than his full-time job. He said the tips were crazy during those hours. The night owls tip the best.
If you are talented get on Fiverr, Upwork, or Etsy. If you can fluently speak another language, you can find translator jobs through sites such as Translators Café, Gengo, and Upwork. If you have a great voice and reading skills, become an audiobook narrator at Audible, Voices, Upwork, or Fiverr. Resell items on eBay, Amazon, or Poshmark. Mow lawns in the summer or shovel snow in the winter. Clean houses or haul off junk. You get the idea. Side hustles for college students are plentiful. There’s a side hustle for everyone.
If you are looking for a few more ideas for jobs check out, The Best Online And Work-From-Home Jobs For College Students.
2. Keep Track Of Your Spending
It’s important when building a budget to keep track of where your money goes. This will help you get a sense of what you are spending your money on and how much you are spending. Knowing what you are spending is the key to adjusting your budget. Keeping track of your spending is also how you save money because you know where every dollar is going.
Start by making a list of all your monthly expenses. Break your expenses down by fixed and variable. Fixed expenses are those that come monthly and cost about the same amount each month. Such as a car payment, rent, mortgage, utility bills, memberships, and insurance. These are easily budgeted as you know what they will be.
Variable expenses are expenses that change depending on your habits. Examples of variable expenses include getting a coffee, going to dinner, buying clothes, watching a movie, or taking a vacation. These expenses fluctuate therefore, you can make the most adjustments in your budget with these.
When creating a budget, I like the app Mint (I’m not affiliated with Mint). Not only is it free, but it also brings together everything from spending, balances, and budgets to your credit score and more. Easily create your budget in Mint. You can also connect all your accounts. From cash and credit to loans and investments, you can see your complete financial picture in Mint. It helps you stay on top of your accounts, bills, and subscriptions. Get notified when your subscription costs increase and when bills are due. Mint will automatically categorize your transactions, so you don’t have to.
Take advantage of the digital tools available to make tracking your finances easy. Your bank or credit card likely has an app with a budget feature. Alternatively, you can use an app like Mint, which integrates all your accounts to help you track your spending and create a budget.
3. Spend Below Your Means
Spend less than you earn. That is probably the number one financial recommendation. It seems obvious, but if you don’t learn to live on what you earn, you won’t get ahead. You must have money left over each month, if you don’t you’re not living below your means.
This is where your budget will come in. When creating your budget, make sure what you are spending is less than what you are earning. Since you are now keeping track of your expenses, you should have a good idea of your recurring expenses as well as what you are spending on them. Use your budget as a guide to controlling your spending. Finetune your budget and see where you can save. If you can’t spend below your means then cut costs. Cancel memberships and subscriptions, don’t eat out, skip the daily coffee, drive a cheaper car, you get the idea. If you cut everything and you still don’t have money left over each month you will need to make extra money. Start brainstorming a side hustle.
4. Set Aside Savings
Setting aside saving when you’re in college may seem impossible but it isn’t. Even the smallest amount can go a long way. Twenty dollars here, fifty dollars there, it will add up. Having a small emergency fund for unexpected bills can give you peace of mind and save you from going into debt.
The goal is, no matter where the money comes from, your job, a side hustle, from your parents, a birthday or Christmas gift, put 10% of it into savings. Pay yourself first. There’s no better way to learn and understand why paying yourself first is vitally important than from Robert Kiyosaki’s book, Rich Dad Poor Dad.
Hands down the best way for a college student to save money is by doing this one single thing.
5. Never Stop Searching For Scholarships
Searching for scholarships was something I did constantly for years. You will get tired of it, trust me. You will write essay after essay trying to convince some mysterious panel of people that you are worthy of a scholarship. I probably applied to over 100 of them. Once you write a few good essays you can simply modify them slightly to fit the scholarship requirements.
I would search for scholarships while I was at the Community College and bookmark any scholarships that I could apply to once I was at the university, once a scholarship is awarded one year, it will likely come back the next year at the same time, be sure to check back.
There so are different types of scholarships, some get pretty wild. However, there are basically 3 types of scholarships, need-based, merit-based, and minority-based. I was never need-based so that got rid of a lot of them. I am Native American so I could apply for some of the minority-based scholarships. However, I couldn’t apply for scholarships that were for minorities who were low-income. Know what you can apply to as it will refine your search and save you time. I encourage you to apply for every scholarship that you can.
After all your hard work and you’ve saved up a little be sure to read, How College Students Should Start Investing: A Beginners Guide, so you can make your money start working for you.