When many students leave their parents’ home for the first time, they are faced with the need to budget and plan their income and expenses on their own.
For this reason, students are often faced with financial problems in the first few months of “adult life”.
Usually, it is a problem of overspending and a shortage of funds, and it can be very difficult to admit it to parents.
What can you do to avoid money problems?
Well, it’s simple enough: you need to learn how to create a student budget that allows you to easily cover all mandatory expenses and not save on extra expenses.
Especially for you, we have prepared useful tips that will increase your level of student financial literacy and help you to forget about money problems forever!
Why Do I Need to Budget?
Maintaining a budget may seem a boring activity for a student, but there are a number of benefits to being in control of your spending.
Imagine that your bank account is a leaky bucket. Periodically opening a tap to fill it up is your income.
But your “bucket” is full of holes where your money leaks out.
The water level will constantly change, but as long as there is enough water in the bucket, there is no problem.
However, a problem will arise if the water level gets too low.
You will have to start plugging those holes in the bucket (your spending habits).
This is what budgeting is all about.
In short, it helps to keep your water level constant so you can keep spending money on things you need and like.
Whether you’re trying to set aside a large sum, such as for a vacation or your first car, or you just want to cover for emergencies like a medical emergency or repairing broken electronics, a well-planned budget will make your college life much easier and more organized.
Planning a Student Budget
The basic mechanism for creating a student budget is quite simple: you need to calculate the level of your income and the volume of your expenses, and then figure out how balanced they are.
It will help you understand ways to reallocate your expenses to make it not only easy to cover all necessary expenses, but also to set aside significant amounts of money.
Set The Level of Your Income
First, find out what your total monthly income is.
Students usually have the following kinds of income:
- money from parents
- scholarship or grant money
- full- or part-time pay
- other savings
Find Your Expenses
Then you need to calculate how much you spend per month on each expense item.
There may be mandatory and optional expenses:
- bills (gas, electricity, water, insurance, cell phone, Internet, etc.)
- transportation expenses (such as bus passes or car maintenance costs)
- textbooks and other materials required for studies
- going to cinemas, clubs, parties, etc.
- meals out of home
- Spending on hobbies and entertainment (buying books, essay writing service, attending workshops and extracurricular activities, buying concert tickets, etc.)
- fitness club membership
- clothes and shoesи
- haircuts, beauty appointments, etc.
- paying for digital services, such as Spotify or Amazon Prime
- travel expenses (airfare, hotels, transportation, sightseeing tickets, etc.)
Calculate Your Weekly Budget
Once you’ve established your income and expenses, you can calculate your weekly budget.
To do this:
- Subtract the amount of mandatory monthly expenses from the total monthly income.
- Divide the result by the number of weeks in the month.
The amount you get is your weekly budget, which you can use as you wish while keeping your obligatory expenses in check.
Set a Goal
So, you’ve calculated your income, expenses, and set a weekly budget.
But, what if you have too little money left over for a weekly budget? Whether you want to maintain a set budget or cut back on your spending, it all comes down to setting financial goals to either reduce your spending or increase your income.
For example, if you spend $100 each month on eating out, you can learn to cook and cut that expense item by at least half.
Or, if you’re spending a lot of money on a fitness club membership, you can find out about your university’s free athletic opportunities or reconsider your approach to sports and choose a different, less costly, type of physical activity.
You will agree that keeping all these calculations in your head is not very convenient, that is why it is important to know about special tools for competent budgeting.
We’ve already told you about how and why to do a student budget.
Now it’s also worth noting the tools that will help you with budgeting and save you time and effort.
Excel Budget Spreadsheet
If you’re not good in math, and you’re not ready for complicated calculations and high-tech solutions, the simplest Excel spreadsheet that you probably learned to create back in school can help you with budgeting.
Here you can easily create separate columns for each item of expenditure and income, and with the help of preset mathematical calculations, you can make a budget calculation.
Mobile Budgeting Apps
If you prefer to use mobile apps, you can download one of the many special budgeting apps.
These apps keep track of all your expenses and income items, create a monthly and weekly budget themselves, point out items that are overspent, and give tips on how to save money wisely.
Some of the most popular apps include:
- Money Flow
- Money Lover
We hope our tips are really useful to you and you will use them in your budgeting.