- Calculate Income
Calculate your projected income by estimating the amount of money you will have to cover your expenses for the semester. This includes savings, job earnings, financial aid, and any funds from parents.
TIP - Protect your future: Don't borrow more than you need. There is no need to be paying interest on those loans you borrowed years after graduation for material things you could do without now. What is the interest on your loans?
TIP - If you're not working, consider working 15 hours a week which could earn you $100/week or more. In addition to providing that income, your job could help you budget your time and build your skills and resume for your future career. Are you eligible for Federal Work-Study?
- List Your Fixed Expenses
These expenses do not vary, such as tuition and fees. The University develops standard budgets for categories of students represented within the school's population.
- List Variable Expenses
Variable expenses are subject to a certain amount of control from you. These include housing and meals, books and supplies, transportation, personal expenses, insurance, and clothing.
- Total Expenses
Add your fixed expenses to your variable expenses to obtain your total expenses.
TIP - Be careful with credit cards! If you don’t have the cash for the purchase, you probably can’t afford it (and do you really need it?).
TIP - Don't use an ATM card for an individual purchase if a fee is involved. Do you really want to pay $2.25 for a $1.50 taco? These little fees add up fast.
- Balancing Your Budget
Subtract your total expenses (Step 4) from your projected income (Step 1). If your estimated expenses are higher than your projected income, you should find ways to reduce your spending.
TIP - Direct deposit! Direct deposit! A check in hand is easily spent. Have your earnings and any financial aid credits deposited into your savings account, and take it out only when you need it.
- Identify Spending
Using your budget, identify your spending patterns. Where does your money really go? Write down within a week every item you buy. Identify your NEEDS vs. WANTS and limit the wants. For each expenditure, ask yourself if you really need this. Think twice about that new iPod that just came out, or a spring break trip that everyone else is taking, cigarettes, the latest cell phone. Financial aid is intended to cover a modest student lifestyle, including your basics: tuition and fees, room and board, books, and a small amount for personal expenses such as clothing, laundry, haircuts, long distance charges, an occasional movie or dinner out.
TIP - Give yourself an allowance. Know what you can afford to spend for goodies each month and stick to it. Divide that into weekly envelopes to help you stay within your budget.
Know your debt. Where does your debt come from? Student Loans, Credit Cards, Car payments? Go to NSLDS for a history of your loans. Contact your loan servicer if you do not know the terms and details of the loan’s repayment.
- Financial Planning. What’s in your future?
Write down your short-term and long-term goals. Start by planning for one goal.
TIP - Saving money in and out of college. Establish your spending habits, control your impulses and bank the rest.
TIP - Tracking paperwork. Knowing where to find your financial records regularly will help you spot mistakes and be able to successfully communicate with lenders and banks.
