Written by the Own Your Destiny Team
Going away to college is an exciting time for millions of young people. You finally get to explore a new city, meet a diverse group of new people, and live on your own for the first time. Of course, many freshman college students don’t realize that living on your own also means budgeting your time and money on your own, too! Because most young people have never had to abide by a strict budget before, it’s common for freshman to run into money problems during their first semester of college.
But creating your first budget doesn’t have to be overwhelming. There are a lot of different ways you can become more financially aware of your money while still enjoying your time away at school. Don’t know where to start? Here are some tips and tricks to follow when it comes to creating a budget for your first semester at college.
Think of a budget as a tool
First things first, you need to start thinking about budgeting as a tool to make your financial goals become a reality. Sure, you may not know what you want to study or what you want to do when you graduate, but that doesn’t mean that you should wait four years down the line to prepare your finances. If you start thinking of your budget as a tool for future success, you’ll be more likely to stick to it. Plus, considering that 56% of women between the ages of 18 and 34 are not creating a budget or saving for retirement, this is crucial for your future financial health.
You may not be ready to start saving for the future just yet, but the financial habits you learn during college will serve you well after you graduate.
Understand your cash flow
You may not have a steady income while in college, and that’s okay. But you do need to take proactive steps so you don’t overspend if you are going a semester without having a regular paycheck. So before you get to college, make sure you’ve figured out where your money is coming from – whether you are using a chunk of your savings, are getting a refund check, or are planning on getting a part-time campus job. Once you have this in mind, you’ll be able to be more aware of what you can and cannot afford. Once you know how much money is coming into your account each month, creating a realistic budget will be so much easier.
Put aside 30% of your cash flow
This chunk of change will be used for optional expenses: going out to the movies, heading to a restaurant, or buying a friend a birthday present. Remember, you’ll need much more money than you think you will for essential everyday expenses like gas, textbooks, and even coffee on campus! If you set aside 30% of your cash flow for these optional activities, you’ll still have a good amount to spend in case of emergency.
If you follow these simple tips, you shouldn’t have a problem when it comes to sticking to your budget during your first semester of college. Now go have fun, but spend wisely!