It is that time of year when kids are heading off to college and seniors are thinking about college. Here are some helpful tips to plan for the future
Think About your Expenses:
When creating a budget, think about the following costs:
- Tuition and school fees. The average cost of tuition and school-mandatory fees is dependent on the type of school you choose. At a public four-year school, the average cost for an in-state student is $10,560, according to The College Board. If you opt for a private school, the average cost is $37,650.
- Room and board. Your room and board is what you pay for housing, utilities and your meals. A college student food budget can get expensive quickly, so make sure you evaluate whether you need your school’s meal plan or if it would be cheaper to purchase your own groceries. On average, room and board costs $11,620 at a public four-year school and $13,120 at a private school.
- Books and supplies. Textbooks, computers, and other supplies can be expensive. The average cost for the past academic year was $1,240.
- Transportation. Depending on where you go to school, you may need to pay for transportation. You may have to pay for your car’s insurance, gas and upkeep, or you may need to purchase a bus or train pass. Typically, students spend $1,230 per year on transportation at public schools and $1,060 at private colleges.
- Personal expenses. As a college student, you also should plan for extra costs like clothing or entertainment. On average, college students spend $2,170 per year on personal expenses at public universities and $1,810 at private colleges.
Create a College Student Budget in 5 Steps
Now that you know what expenses to expect and what money you’ll have coming in, create a budget using these steps.
1. Calculate How Much Money is Available Per Month and Per Semester
Add up all of the money you have available from different sources, including your parents’ contributions, your own income and savings, scholarships, grants and student loans. That money is how much you have to spend each year.
You may find it helpful to divide that amount by semester or by month. By working with shorter increments, it may be easier to track your spending.
2. List All of Your Expenses
Make a list of all of your school-related expenses, including tuition, rent, groceries, insurance, utilities and textbooks. Ideally, there should be a little extra money after your fixed expenses are paid to cover additional costs or emergencies that pop up.
3. Identify Areas to Cut Back On
If money is tight—or if you’re looking to minimize the need for student loans—look for areas where you can cut back. Even small adjustments can pay off over four or more years of school.
For example, let’s say you currently subscribe to three streaming services for entertainment at the cost of $10 each. By canceling all but one, you’ll save $20 per month—that’s $240 per year, and $960 over four years.
Other things you can do to reduce your expenses include:
- Get a roommate to split housing and utility costs
- Cook your own meals
- Rent textbooks instead of buying them
- Downgrade your cell phone plan
4. Think About Goals
When creating your college student budget, make sure you think about your educational and financial goals. For example, you may want to study abroad for a semester or buy a car once you graduate. To make your goals a reality, set aside a little money each month so that you’ll have the cash you need.
After creating a budget, make sure you check it often. It’s a good idea to review your budget weekly or monthly to help you stay on track. By making it a habit, you can minimize excess spending and stay within your limits.
Tracking Your Spending
As an incoming college student or a high school senior , it’s important to know how much money you have and how much your education will cost. Developing a budget will help keep your spending in check and reduce the need for student loans, meaning you’ll have less or no debt to pay off after graduation.