Just got an invitation to a night out at the bar? Make sure you can afford it before you blow the rent money on booze.
If you’re not sure how much money you have left, it may be time for you to make a budget.
A budget helps you keep track of your incomes and expenses, so you are aware of your financial health at all times. Budgeting is not the most glamorous things you can do, but it allows you be in control of your finances.
College Budget Timeframe
A budget is a financial plan for a fixed amount of time. You can set the timeframe to fortnightly, monthly or even every semester. Choose to match the timeframe with the frequency of a big, regular income or expense, such as payday, rent or tuition.
Keep in mind that the shorter the timeframe, the more effort you have to put into budgeting. However, it will also be easier it is for you to monitor your cash flows because you will be forced to review the budget more often.
List of Incomes for College Students
The first thing to do when you make a college budget is to list all your income sources.
If you have a part-time job, check how much you get on average every budget period. Even if the amount varies every payday, this will help you make a good estimate of your next paycheck amount.
If your parents support you financially, get them involved in the budgeting process. Let them know you’re making a budget and check how much they’re going to contribute and for what expenses.
If you receive government payments like Austudy or Youth Allowance, note these down, too. Such payments are usually easier to include in the budget because they’re paid regularly and the amounts don’t often change.
Other common sources of income for college students include scholarships and student loan payments.
List of Expenses for College Students
Listing expenses is often one of the most challenging step of making a budget because keeping track of every single expense doesn’t come naturally to most people.
Try making a note on a piece of paper or on your smartphone every time you pay out cash or swipe your credit card. Do this for a week, two weeks or even a month.
Once you have a good, complete list, categorise your expenses into fixed and discretionary. Fixed expenses include those you have to pay, such as tuition, rent and electricity bills. Discretionary expenses are those you can do without, such as entertainment or snacks.
Planning Your College Budget
After you estimate your incomes and expenses, you should have a clear idea of how you can distribute your money into various expenses. You probably also notice some areas where you can cut back. For example, you may realise you spend too much money on coffee or taxi fares. Make sure to set aside some money each budget period of savings or emergency reserves.
Over time, keep track of your incomes and expenses. Every time one budget period ends, check how well you stick to your budget and plan how you can improve next time. Reward yourself occasionally for being a financially responsible college student.