As a college student, you're probably trying to figure out how to manage your money better. If you're like many young adults, this is perhaps the first time in your life you've been 100 percent responsible for your finances. Plus, you don't want to graduate with a mountain of debt. Fortunately, there are plenty of ways to be budget savvy in college and avoid overspending, and we have a few tips to help get you started.
How do you become budget savvy while in college?
As any college student knows, money can be tight. Between tuition, textbooks, and living expenses, it can be challenging to stretch your dollars to cover everything. However, there are several ways to become budget savvy while in college. By following these tips, you can stay on top of your finances and avoid going into debt during your college years.
1. Try to plan before you start college
It's essential to plan your finances carefully before you even take your first course. One way to do this is to size up your potential expenses and ensure you have the resources to cover them. You should also consider how you will pay for your education, whether it's through scholarships, grants, loans, or your savings. With proper planning, you can avoid financial stress down the road and focus on getting the most out of your college experience.
2. Choose a college that you can afford
When choosing a college, it's essential to consider the overall cost of attendance, including tuition, room and board, and other expenses like textbooks, supplies, and other course-related materials. While it's tempting to choose the most prestigious school possible, it's important to make sure you can afford the total cost of attendance. Taking on too much debt can limit your future options and strain your finances for years to come. By choosing a college you can afford, you'll be setting yourself up for success both during and after your college career.
3. Don’t forget about financial aid
Paying for college can be burdensome, but many resources are available to help make it more affordable. One of the most important is financial aid. Financial aid comes in two forms: need-based and merit-based. Need-based aid is awarded based on the student’s financial need, while merit-based aid is awarded based on the student’s academic or athletic achievement. Many private scholarships are also available, which can be found through a simple online search. The best way to find out what type of aid you qualify for is to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is used to determine your eligibility for federal, state, and institutional aid. It is vital to fill out the FAFSA as soon as possible after October 1st of each year, as some aid is awarded on a first-come, first-served basis.
4. See what grants and scholarships are available
One of the best ways to offset the cost of tuition and other expenses is by searching for scholarships and grants. There are many organizations and foundations that offer scholarships to students who meet specific criteria, such as academic achievement or financial need. Grants are also available from federal and state governments and colleges and universities. These awards are typically based on financial need, but some may also be given to students with exceptional academic records. By doing a little research, you can find a variety of scholarships and grants that can help you pay for college.
5. Did you know you can get tax breaks for being in college?
Many students are surprised to learn that they may be eligible for some tax breaks simply by being enrolled in college. The most common tax break for college students is the American Opportunity Credit, which can provide up to $2,500 per year for qualified expenses such as tuition, fees, and course materials. Other potential tax breaks include the Lifetime Learning Credit, the Student Loan Interest Deduction, and the Tuition and Fees Deduction. To take advantage of these credits and deductions, file your taxes early and track all your qualifying expenses. With a bit of planning, you can minimize your tax liability and make the most of your college education.
6. What is a reasonable monthly budget for a college student?
By being budget savvy in college, college students can better manage their finances and ensure that they have enough money to cover their expenses. There are a few things to consider when creating a tight budget for college students.
7. First, you need to know how much you're making
One of the most critical steps in creating a budget is to determine your income. This can be tricky, especially if you have irregular income or are self-employed. However, it is essential to have a clear understanding of your financial picture before you can start making informed decisions about your spending. To get started, look closely at your pay stubs and bank statements from the past month. If you are self-employed, you may need to estimate your income based on your monthly expected earnings. Once you have a clear idea of your monthly income, you can begin to create a budget that will help you make the most of your money.
8. What are your bills that continue monthly
When creating a budget, knowing which bills occur every month is essential. This will help you figure out how much money you need to set aside each month to cover your expenses. Common monthly bills include things like rent or mortgage payments, utilities, car payments, and insurance premiums. Of course, this is just a general list - your specific situation may vary. But knowing which bills you must pay every month is a crucial step in budgeting effectively.
9. How do I plan for the unexpected?
When creating a budget, you need to be prepared for the unexpected. You never know when your car will break down or you might have to go to the hospital. That's why it's crucial to have an emergency fund you can tap into when something comes up. Start by setting aside however much you can every month and put it into a savings account. That way, if something does happen, you'll have the money to cover it, and if nothing happens, you can use it to reach your financial goals.
10. Where is the fun in my college fund?
When most people create a budget, they focus on essential expenses like housing, food, and transportation. However, it's also important to account for fun in your budget. After all, life isn't all work and no play. Whether you enjoy going out to eat, exploring your city, or taking weekend trips, make sure to set aside money each month for leisure activities. Including fun in your budget will make you less likely to overspend when unexpected opportunities arise. And who knows? You might even find that sticking to a budget can be fun too.
11. How do I track all of my expenses?
Tracking your expenses can seem daunting, but it doesn't have to be. There are several simple ways to keep tabs on where your money is going, and by keeping track of your expenses, you’ll get a better handle on your finances and make informed choices about your spending.
12. Use a free budgeting app
There's no shortage of budgeting apps on the market, but choosing the right one can be challenging. If you're looking for a free budgeting app that can help you track your expenses, here are a few things to keep in mind. First, look for an app with easy-to-use budgeting tools. You should be able to easily track your income and expenses and set budget goals. Second, look for an app that offers personalized recommendations. Every person's financial situation is different, so it's important to find an app that can provide tailored advice. Finally, make sure the app you choose has robust security features. After all, you'll be inputting sensitive financial information, so you'll want to ensure it's well-protected. There are a lot of great free budgeting apps out there, so take your time and find one that best meets your needs. According to TechRadar, some of the best budgeting apps you might consider include:
13. Use an Excel spreadsheet
An Excel spreadsheet is an excellent tool for tracking your expenses, allowing you to easily see where your money is going. To get started, create a new spreadsheet, and list your monthly income and expenses. Be sure to include both fixed expenses (like rent and utilities) and variable expenses (like food and entertainment). Once you have all your information entered, you can start seeing patterns in your spending. This can help you to make better financial choices in the future. For example, if you notice that you are spending a lot of money on dining out, you may want to cut back to save more money.
14. Be creative when you need to buy something
We all have to buy things from time to time, whether it's groceries, clothes, or a new car. However, getting into a spending rut is easy, where we mindlessly purchase the same things repeatedly. This can lead to boredom and frustration, as well as wasted money. One way to avoid this trap is to be more creative when you need to buy something. Instead of automatically reaching for the same old thing, take a few minutes to explore your options.
15. Thrift store shopping and swapping with friends
Thrift store shopping and swapping with friends are two great alternatives to buying everything new that can save you money and help reduce waste. Thrift store shopping can be a great way to find gently used items at a fraction of the cost of buying them new. And since most thrift stores are nonprofits, your purchase will likely also support a good cause. Swapping with friends is another great option for getting what you need without spending any money. Hosting a swap party is a fun way to get together with friends and maybe even declutter your home. You can swap clothes, books, toys, crafting supplies, or just about anything else you can think of.
16. Check for sales
When you need to purchase an item, it's always worth checking for sales or special offers first. This could mean looking online for discounts, signing up to receive emails from your favorite retailers, or simply waiting for a seasonal sale. By taking the time to look for a good deal, you could end up saving yourself a significant amount of money. Many retailers offer loyalty programs that give members access to exclusive sales and discounts, so if you frequently shop at a particular store, you could sign up for their loyalty program. With a little effort, you can find great deals on the items you need - and stretch your budget further in the process.
17. Coupons, Use them!
One of the best ways to save money when shopping is to use coupons. Coupons can be found in various places, including magazines, newspapers, circulars in the mail, and online. Many stores also offer their own coupons, which can be used in conjunction with manufacturers' coupons. When using coupons, it is important to read the fine print carefully to ensure the coupon will be accepted. Some coupons have expiration dates or are only valid on certain days of the week. Others may be limited to specific items or may exclude sale items. By carefully planning and using coupons, it is possible to save a significant amount of money on everyday purchases.
18. Use all the college student discounts you can get
One of the best ways to save money in college is to take advantage of all the student discounts available to you. For example, many stores offer student discounts on everything from clothing to textbooks. You can also get discounts on things like entertainment and travel. And don’t forget about those all-important college student discounts on food. Most restaurants will offer some kind of discount if you show your student ID, so be sure to ask about it when ordering your next meal.
Knowing you won't run out of money in college
There's nothing quite like the peace of mind that comes with knowing you won't run out of money in college. While it may seem like a daunting task to save up enough money for four years of college, we hope we've helped you see that by following these simple tips, you can rest assured knowing that you won't run out of money during your college years.
And at University of the Cumberlands, we're here to help. Contact us to learn about the many financial aid options available to you as a University of the Cumberlands student, or request more information today!