College Financial Planning Is The First Step
College is one of the most exciting times in a person’s life. For some, it is the first real taste of freedom. Suddenly you get to make all your decisions without the direct influence of parents and family. Making these decisions yourself can be satisfying, as well as overwhelming. One huge area of this newfound independence is balancing finances. While it might not be the most exciting aspect of college life, understanding your budget can help ensure that you make the most out of your experience with the least debt coming out of it. Establishing a realistic budget and reducing expenses is more important now then ever before as we continue to face the economic and financial challenges of the COVD-19 pandemic.
Budgeting is key to financial success in and out of college. According to Debt.org, “the challenge for college students is not making a budget; it’s sticking to it.” Many of the expenses you begin to experience in college—rent, utilities, food, clothing, and of course, the unexpected, will continue throughout life. The great part about conquering this concept early is that the consequences are usually less complicated in college. By creating a budget, you’ll be able to fully understand what money you have, where it needs to go, and what you’ll have left to set aside to enjoy.
How Do I Start?
Set aside time to sit down and write out your budget. You’ll want to start with what income you have—employment, overage checks, grant payouts, etc. Once you understand what money you have coming in, you can begin to subtract. How much do you need for rent? Utilities? What about cable or other monthly subscriptions? Consider how much you spend on food or clothing in a month. You want to make sure that you give yourself wiggle room. Be realistic with your true spending needs. A budget shouldn’t be discouraging; instead, it becomes a guidebook to where you can better prioritize your spending.
Where Can I Cut Spending?
You don’t have to sacrifice everything you enjoy by keeping a budget; however, you must consider getting creative or using moderation.
- Food—In 2020, college students spent $39.6 billion on food alone. Yes, you need to eat. And you should also enjoy eating. This doesn’t mean you should go out to restaurants or order take-out every day, but it also doesn’t mean that you survive off ramen noodles. It’s about finding a balance. If you have roommates, consider shopping together and splitting the cost. This cuts food waste and provides an opportunity to bond over “family” meals.
- Coffee—While it may not be for everyone, it is undeniably a big business, especially in college towns. If you love your coffee, consider a home brewer to cut on expenses. Think about it; if you get a $4 coffee on your way to campus each day, calculate what you’re spending every month! Making your own coffee every day can have a great impact on your budget.
- Clothing—There are many ways to keep an eye on what you spend on clothing. Simple things like checking the clearance rack, thrift shopping, even having a clothing exchange with others in your home or dorm can greatly expand your wardrobe while you spend less.
Other Ways to Cut Costs
Keep an eye on the student services your school offers. You may qualify for free printing, access to cheaper materials or products, even discounted meals and clothing. It never hurts to see if a discount is available. You can often find discounts at restaurants, shops, and even some websites. If you do own a credit card, be wary of how often you use it. Try to set it aside for emergencies only. You also want to make it a habit to overlook monthly statements for all your financial accounts. It’s easy for a trial subscription to fall through the cracks.
Finances can be a headache, but setting yourself up with a strong budget plan will allow you to enjoy your college experience without fear of debt. Reach out to us for more information about College Planning in New Jersey.