When it comes to being a college student in this busy society, it can be difficult to save money. After all, you’re busy with school, social life, family, etc. How are you supposed to budget along with that, and do you really need to?
Cash envelope budgeting and budgeting, in general, are great tools for helping college students get ready for bills and budgeting scenarios after their degree, and also assist in helping you save for the future now. Having a budget reduces financial stress, and there are several ways you can start.
When it comes to budgeting, college students aren’t outside of the realm. There are plenty of software tools to use for budgeting as well as great tips that you can find below, which will explain to you exactly how to start and why college students should create a budget while they’re still in school.
Why Budget While in College?
You may be wondering what the benefits of budgeting are while you’re in school. Besides, you’re already busy with so much and it’s best to leave the money management until after school, right? Wrong.
Here are the possible benefits of starting a budget for yourself while you’re still in school.
- You have more money to save up for big purchases such as a new car, paying off student loans, or an apartment deposit.
- You can get into the habit of saving now so that when you have more bills in the future, it won’t be as difficult for you to continue the habit.
- Learning how to budget can increase your financial wellness and allow you to learn more about all of the financial areas in your life.
- You will start to see how much you’re really spending and maybe cut back on how many coffees you’re buying every day.
- The real fear of money that you might feel when you go to open your bank account each day will start to disappear. You will have more confidence in your spending habits.
- You will find that you actually have more money for the things you’re wanting to do. Since you’re not making impulsive purchases, you’ll be able to save for the things that really count.
The Loyola University of New Orleans even did their own study on budgeting in college and why it’s important. You can check that out to see some more benefits of creating a budget or cash envelope. You can also look at what the FSA (the people who control FAFSA) have to say about budgeting in college.
There are hundreds of benefits to cash envelope or other budgeting methods. So how do you get started? It’s simple.
How Do I Start a Budget in College?
When starting a budget in college, you want to start small. Don’t overwhelm yourself. You’ve already got so much to do each day, so it’s important that you also manage this carefully, giving yourself space to make errors. You can up your budget amounts once you’ve gotten the hang of saving money.
Below are some easy-to-follow tips on how you might want to start budgeting.
Software- Use a free and guided budgeting app or software. Some of these are software such as Truebill or Mint. These are free apps that allow you to set a budget for yourself and follow it by tracking in the app. It can also track for you, using your bank account. You can also pay for subscriptions to some of these services to get extra budgeting help.
Cash Envelope Budgeting- There are plenty of ways to save money, but some people use the cash budget method. Within this method, you’re able to physically take out cash from an envelope for each category that you’re spending.
For example, you could put twenty dollars in an envelope labeled “coffee” and when you go to buy your coffee, take the envelope with you. When you run out of cash for coffee, you can no longer spend that money. This is an excellent choice because it helps you visually see what you’re spending your money on, which helps you see money as a limited resource.
Find a Mentor- It may be easy to think that you know it all once you’re on your own in the adult world, but there’s something very valuable in finding an older and wiser adult to help you on your journey financially. Since we don’t all learn how to budget in school, asking someone with real-world experience can be extremely valuable. See if your mom or dad or even a coworker is available to give you some lessons on how they budget!
Take a Class- If you’re wanting to kill two birds with one stone, taking a class can both teach you how to budget and give you credit for school. There are plenty of financial classes at most Universities, and in general, you can take them to fulfill a general education requirement credit.
If you’re going to school for something like Business, Economics, or Finance, you’ll most likely take these classes anyway, but it’s a great idea for anyone looking to start early. You could also try out a financial math course, which will help you further understand the numbers behind the budgeting you’re doing.
What is a Reasonable Budget for a College Student?
A reasonable budget might be different for everyone when you’re in school, but even if your budget is different than someone else in your grade, it doesn’t matter. What matters is that you’re learning the valuable skill of saving money and making sure all of your bills are paid.
If you’ve inherited a lot of money from your family or have a really good job, your budget might be a bit higher than someone else who has a part-time job and student loans. Either way, you can both budget to make the most of your money. Here’s what’s reasonable:
- Sectioning off a percentage of your overall income and assets to certain categories for each month
- Saving a certain percentage of your income for emergencies, even if everything else has been covered
- Put more money into the things that you value most and will help you most in forwarding your education and experience in life.
- Generally, try to budget towards your bills first and your wants and desires last
- Try to save a bit of money each month, even if this means just putting 5 dollars away in an envelope and forgetting about it for now. Every bit counts.
- Try to put off unnecessary purchases until you’re more financially stable.
- Allow yourself some wiggle room, just because you’re new to budgeting.
If you’re following these steps, it doesn’t matter what your income is, you should be able to budget reasonably. An example percentage table could look like this:
| Budget Category | Percentage of Income | Amount Paid |
| Groceries | 30% | 400.00 |
| Rent | 30% | 700.00 |
| Car Payment | 30% | 100.00 |
| Fun and Entertainment | 10% | 50.00 |
This is just an example table, and it doesn’t leave much room for anything outside of necessities, but it shows how you could write down and organize your own budgeting if you’re looking for organization. You can also try using an app or software that organizes and lists your budget for you.
How Much Money Does a College Student Need Per Month?
The financial needs of each college student can vary, but there’s a general idea of what is best for the general college student to make.
You need to take into consideration these things:
- Do you receive money from your family?
- Is your college paid for or through student loans?
- How many bills do you have?
- What big purchases would you ideally like to make in the next year?
- Do you have financial help in case of an emergency?
- Do you pay for your housing, live in student housing, or with your family?
- Do you have a part-time or full-time job or no job at all?
- What are your career goals?
- What are your long-term goals?
- Are you on a meal plan or do you have to pay for groceries?
When taking into consideration these questions, you’ll be able to easier think about what you value and how much money you’re going to need during your time in college. For some people, their parents cover their college housing and food. For others, they work while attending school and pay off their own car, insurance, college bills, gas, food, and housing.
Affordable Colleges Online even offers a college expenses calculator to help you figure out what you might be spending in college. It factors in your income and expenses and then gives you a great place to start for your budget. If you don’t have a lot of money, this calculator might help you put things into perspective a bit.
Consequences of Living Without a Budget in College
If you’re not living with a budget, a lot can happen. The majority of students do not have a ton of money. That’s where the jokes about college dorm room cooking come from. For the majority, sometimes all that is available is ramen noodles for the 15th night in a row.
Budgeting makes it so that you don’t have to do this. If you’re unable to make a budget and continue to spend your money without thinking, here are some of the consequences:
- A poor sense of financial responsibility
- An idea that money is infinite
- The possibility of over-drafting your bank account
- The possibility of more debt if you’ve already taken out student loans or credit that you haven’t paid back
- Inability to buy larger purchases, as your money has all been spent on smaller desires in large quantities
- A lack of understanding of finances later in life
- Difficulty making good choices
- Impulse control problems
Almost everyone can struggle with impulsive choices at some point in their life. You might find that you accidentally ordered a huge case of decorative mugs while drunk at a party. Or maybe you can’t stop yourself from buying one too many things at the dollar store (yes, even that can add up!)
Whatever it is, you’re not alone in your impulses. Part of budgeting, however, is learning to control those impulses so that your money actually gains more rewards and more desires for you in the long run. Sometimes the best things come when you wait!
How to Make Money for Budgeting in College
You may think it’s impossible to even make money while in college to start budgeting. How do you budget if you have no income whatsoever? Luckily, it’s not that hard! It’s 100% possible to earn and keep income in your wallet during your days in class. You don’t even have to work full-time or part-time. Some job opportunities allow you to work on your own schedule.
- Try out Freelancing- Freelancing allows you to work remotely in most cases. This can allow you to earn money in your free time when you want to, which is less pressure than working for an employer who doesn’t care when you’re sick and tired.
- Food Delivery- If you have a car already, food delivery is a great option. You can spend 2 hours each night, or 6 hours on the weekend driving food deliveries around town and making great money. Some students have reported making up to 200.00 per night! This is more than most jobs offer, and it’s great for extra money for your budgeting purposes.
- Work Study or College Campus Careers- Your college may even offer its own career opportunities. Look on the campus job board (or online board) and see what is available. Some jobs are very part-time, and some allow flexibility with your class schedule, which makes it much easier to make money and still learn.
- Odd Jobs- You can find many odd jobs to do. Sometimes they’re posted on Craigslist, other times they’re posted on specific odd-job apps for babysitting or pet care. You can even walk dogs for people in town for a good price! Check out what is available in your area.
- Take Advantage Of Student Discounts- Student discounts are great ways to save money on products you plan on purchasing. There is a really good article that goes over some of the best discounts that students can get. Check it out here if you want to know more.
No matter what you’re looking to do, there’s most likely an option. You don’t have to be stuck at a part-time job with a rigid schedule, knowing you’re just going to be fired. The pay is often not even that good at most entry-level jobs. You can get good experience doing more specific jobs like the ones above and make a good amount of money to kickstart your budgeting experience.
Long-Term Benefits of Budgeting
You may be able to see the short-term benefits of creating a budget while in college, but it’s actually great for your future too!
Think about it—you joined college for your long-term education goals. Maybe someday you want to be a doctor or a nurse. Realistically, you can’t be a doctor or a nurse immediately. It takes many years of schooling and experience to know what you’re doing.
The same applies to budgeting. When you’re creating a budget for yourself, it’s important to remember that it takes time. You may not be a pro right away, but someday you’re going to see the benefits.
When you learn how to budget in a safe and secure and financially smart way, you’re teaching yourself skills for life. These are skills you can teach your own kids, and hopefully lead a generation of financially informed adults in the future!
With budgeting, you can also learn how to save money. This gives you the opportunity to someday make the big purchases you’ve been dreaming about. This could be a nice car or even a house! Don’t sell yourself short. Deciding not to purchase 30 coffees in one week won’t kill you, and it might someday add up to something big when you do have enough money for something bigger.
Patience really is a virtue!
Conclusion
Overall, budgeting in college is absolutely possible and a necessity! You can budget whether you have money or not much at all. You can budget if your parents are providing you with an income, or if you’re earning it all on your own. You can budget if you’re young or old.
College can be an extremely stressful environment, but irrational and impulsive spending can actually make it even more stressful. You might feel great at the moment when you buy your entire group of friends several rounds of drinks, but when you realize it put you at risk of not paying your telephone bill, the stress that from this choice can cause issues in class and performance in school.
Give yourself time and understand that you don’t have to be a finance pro from the beginning, but just like you’re starting out in your new field of study, you can start out in financial planning with a fresh state of mind and new goals. These goals can someday turn into something amazing if you let them! So go out there and dream big!
Sources Used
https://studentaid.gov/resources/prepare-for-college/students/budgeting
https://www.affordablecollegesonline.org/calculator/college-cost/