Tuesday, September 5, 2017
Budgeting for Students: 7 Solid Tips
This time of year always has a different feel to it. There is something in the air once the students start going back to school. I remember when I was younger I always had a nervous/excited feel when it came to going back to school. Once I headed off to university the feeling changed to anxiousness. University wasn’t a time of celebration or happiness for me. Every year in university was a constant struggle with health and money. I was constantly sick and constantly broke. I look back at those times and know many ways I could have done things differently. My posts often come off as a bit “preachy” but I promise there is a reason for that. I’ve been there, and further. I’ve done the No Name can of soup for dinner. I’ve used the Food Bank and I’ve maxed out credit cards just to keep the lights on. I know what it is like to be a poor student and I also know what is like to crawl out of that spot. For those heading into post-secondary education this week a lot of different thoughts will be going through your minds. The last on that list will be budgeting I’m sure of it, but it should probably be the first. In this post, I will give 7 budgeting tips for students that will help make their college life a little easier. So put down the beer funnel for a minute and take some notes.
1) Plan out Your Spending for the Semester
Four months can fly by, believe me. If you don’t think so try and remember anything from this past summer. Setting a spending plan for each school semester is key. If you are on a meal plan, food spending should be a minimum. If you live in a dorm, housing shouldn’t be an issue. A little spending cash should be all you need to get by. Living off campus makes it a bit trickier. Understand everything you need and that is your break-even number. Anything else is a luxury. If you need $1200 a month for rent, bills and food and you have 5K in funding to start the semester then there shouldn’t be an issue. Take an hour of your life this week and map out the whole semester; you will be happy you did.
2) Speaking of Food
We all hear of the Ramen Noodle eating student who can’t afford to eat a decent meal. Whatever happened to them? Oh yes, they do exist, but they have been replaced by the take-out eating, restaurant going, student foodie. I know this for a fact; I have been serving them for the past 13 years in local restaurants. Food should not be the biggest expense a student has. My freshman 15 was the reverse, I lost 15 pounds and my GPA went up 1.5 points. If you are getting fat in university you are eating way too much. Learn to cook, share the duties with the housemates and believe me you will be better off. Fifty bucks each a week can get you a lot of actual food. Problem is you have to cook it, so don’t be lazy. Your waistline will thank you.
3) Reduce Costs Anywhere you Can
It should be a mission of yours as a student to cut any and all costs you can. Share expenses such as hydro, internet and even a car. Speaking of a car, if you live on campus why do you need a car? Consider ditching the car during the school year if you can and use the bus pass provided with many school’s tuition fees. Obviously shared accommodation is cheaper so look to that for housing. Used book’s work just as well as new ones and some books even have PDF versions online that you can print off. I remember I used to go to orientation events of campus clubs to get the free pizza. Now you don’t have to do that, but saving money should be an important goal of yours while in college.
7 Financial Tips for Students – Huffington Post
4) Interest Payments Suck
You cannot, and I repeat cannot, have monthly interest payments as a part of your budget while in school. This means not racking up debt with costly credit cards or lines of credit. Summertime working should be spent saving for the school year not paying off the partying of the past year. You must limit credit card use during the school year. Every dollar counts and even something as small as $40 a month in interest hurts your cash flow. It is time for bare-bones budgeting so costly interest must go.
5) Keep track of your spending
There is no excuse to not keep track of your spending. Even the super rich have to do it, so students are not exempt. There are so many apps and programs to help you with this so get on it. You have to monitor inflows and outflows so that you don’t run a massively negative monthly budget. This goes hand in hand with reducing personal debt. If you run a positive cash flow you will not have to worry about paying back nasty debts when school is over. I have a budget worksheet you can download; it will help you get started. Once you keep track of spending you then have to make adjustments as you go. Use the discipline that you use to study for exams and apply it to your own finances and you will be amazed by the results.
6) Lump Sum Worship
I remember when my student loan came in every September, it would be spending time. The same was true when my bursary would come in December. Looking back it might have been the worst mistake I made when it came to my university finances. You have to worship these loans and lump sums and distribute them accordingly. If you only have enough money to pay your rent for the whole semester with your student loan then do that. If it takes opening up a separate bank account that is tougher to access so be it. Wasting these lump sums could lead to you being super broke 2 months into the semester. Pre-pay rent or any other bill you can. You will thank yourself later for it.
The Real Reasons for a Rainy-Day Fund – Budget Boss
7) Make any money you can
When I was in my undergraduate studies I only had about 20 hours a week of class. Add reading, studying, and projects into the mix and there were about 50 hours a week of work to be done. That left me able to work on the weekends to make some extra money. Unless you are in engineering I don’t see any reason for a student to not work while in school. I envied those that had everything paid for and didn’t have to work, but sadly that isn’t the case for most of us. Get a part time job and make a little bit of extra money. If that job only provides you with money for food than you have accomplished something. Working during the school year can be the difference between having crushing debt once school is done and transitioning into work life relatively easy.
Being a student isn’t easy. You have to focus on studies, professors, internships and even your social life. One thing is for sure; graduating with less debt is always ideal. You have to have this mentality and it has to become a lifestyle. I know the feeling of crippling student debt. Even worse I know the feeling of crippling personal debt too. It is easy to let things slip away and use the excuse, “Well everyone is in debt so it’s no big deal.” It is a big deal so make sure you focus on budgeting and saving money while you study.
Thanks for reading today’s post and don’t forget to tune in tomorrow for where I delve deeper into the poor student myth. If you are interested in starting a savings or debt plan do not hesitate to contact me at joe@budgetboss.ca. Have a great day friends!
“We shouldn’t be profiting from our students who are drowning in debt while giving a great deal to the banks. That’s just wrong.” – Elizabeth Warren
Email – joe@budgetboss.ca
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