Budgeting: A Must for College Students
With confirmed college places now in the hands of the fortunate, it’s likely that your mind will be awash with thoughts of your impending study, of friends yet to meet, and of an exciting new city just begging to be explored. College life could never (and should never) be described as all work and no play, but having an awesome social life (or even a halfway decent one) does not come cheap. Believe it or not, your student loan is not actually intended to be spent on beer and wild nights out. Rather it’s meant to cover expenses like rent, food, and text books. You could always take advantage of free online textbooks (Bookboon offers over 800 textbooks which can be downloaded for free), but unfortunately we can’t point you in the direction of a similar site for free digs or free food. There’s only one thing for it. You’re going to have to brush up your money-management skills. In the plainest terms – you need to create a student budget. Don’t worry – it’s not as painful as it sounds. You’ll be able to really enjoy student life without having to suffer the burden of unnecessary debt, plus you’ll learn some skills that you can put to use throughout your post-college life (it might seem a long way off, but it’s really not).
On a very simple level, creating and sticking to a realistic budget should mean that your spending at college will never exceed your income. But what is your income as a college student? You’ll need to make a list of any federal aid you’ve been awarded, as well as any scholarships and grants. Add in any money that your parents are planning to put into the pot, along with any wages that you will earn. The figure you come up with is your income. Staying out of debt is as simple as not spending more than this figure. Of course, you might not know what part time job you can get while at college until you actually get there. If that’s the case, work out your income without adding any wages to the total. It will give you a worst case scenario at least, and any income you manage to secure after that will be a bonus. Next up is to work out your expenditure, including things like rent, course expenses, and utility bills (if applicable). The difference between your income and expenditure is what you have left to live on. Don’t get too carried away and start shouting “the beers are on me” to all your new found friends though – you have to eat out of that figure too.
It pays to remember that while federal student aid is probably the cheapest long-term loan that you will ever get, every other form of loan or borrowing needs to be treated with extreme caution. Credit cards, overdrafts, hire purchase, store cards, and personal loans should all be avoided. It’s a slippery slope and the last thing you want is to be starting your working life after college with a mountain of unnecessary debt to pay off. If you find yourself in a financial situation that is so precarious that these types of credit start looking increasingly tempting, seek advice from your student welfare officer. It pays to get advice first, as once you’ve taken up the extra borrowing it can be difficult to break free from it. Indeed, if you do find yourself in financial strife, burying your head in the sand is not the answer. Contrary to what many people seem to believe, these things won’t go away by themselves. Speak to someone you trust and you will usually discover that there are options available to you.