Most students are poor. That can add another layer of stress on top of grades and classes, but it’s easy to reduce that stress by budgeting. Budgeting takes some skill, but the results are certainly worth spending a little time to learn how to put one together.
Start With Fixed Expenses
People often make the mistake of starting their budget with estimated expenses. Estimation is difficult, especially when you don’t know exactly how much you can afford for each category, so it’s best to start with fixed expenses, like rent and utilities. Once you have a total for your fixed expenses, subtract them from your income to find out how much you can spend on categories that are can handle more variation. This will prevent you from overestimating the flexible categories and then needing to cut things to make rent later.
Assume High Expenses, Low Income
Planning for the worst outcome means being safe no matter what happens. Most people don’t have any trouble finding a use for a few extra dollars at the end of the month, but lots of people run into problems if they come up short. If your income varies from one month to the next, write your budget with the assumption that it’s going to be at the bottom of the range. If your expenses vary, assume that they’ll be at their most expensive. The reality will probably be somewhere in the middle, but this method will keep you prepared no matter what happens.
Keep It Updated
Going to college is a major life change, and your lifestyle is going to change even more as you get used to it. Your budget is going to have to change at the same time if it’s going to stay useful, but it’s easy to forget about updates. Most students who get a new job or move to a new room do it between semesters, so that’s the best time to take a few minutes to make sure the budget is still accurate and useful. Changes tend to be slow, so it won’t take very long to check everything, but it’s still important to stay up to date on your budget to avoid trouble.
Budget, Then Save
Most people can’t fit everything that they want in their first budget. Fortunately, it’s often possible to find ways to save money. The first budget should help you find out where you are overspending, and you can use that information to find out how to save money in the most effective categories. There are a lot of ways to make and save money as a student, and picking the right ones can open up a lot of extra space in your budget. It probably won’t get you everything that you want, but you’ll be in a better position than you were when you started figuring out how to save money.
Expect The Unexpected
Every budget should have a section for unexpected expenses. It’s impossible to predict absolutely every expense, but planning a way to deal with surprises can solve most problems before they start. If you don’t end up using the money in this section during the month, add it to your savings instead of treating it as extra spending money. If you save it, you’ll have even more security in case a major accident happens. You shouldn’t rely on this as your only source of savings, but even a little bit extra can add up over time.
Mastering the art of budgeting is the best way to take financial stress out of your life. It takes a little bit of effort, but a good budget is all that it takes to stop worrying about money so you can spend more time worrying about your classes.