So you’re a freshman, and for many this is first time in your life you’ve been handed the responsibility of independence, and managing your own finances. This may be daunting at first but you’re not alone, and you’ll find your new acquaintances and coursemates will be experiencing the same struggles. The first thing you need to master before you can begin to budget is discipline. No means no. Learn to deny yourself luxuries that you don’t need.
Ask yourself: “Do I need it?”
If the answer is no then it’s recommended that you don’t make the purchase. This logic should be applied to all of your recreational activities and any self-indulgence outgoings if you are strapped for cash.
Step 1: Calculate your income
Work out where you have money coming from. You’ll likely have student loans in order, and if you’re lucky you’ll be receiving financial help from your parents and maybe even a scholarship or grant from your chosen college. Work this amount out as accurately as possible; be realistic! You’ll be thankful for it in the end.
Step 2: Set your budget
Using your estimated income you now need to input these into a customised form. Typical suggestions are using a spreadsheet program for best results. Create yourself some simple columns and rows detailing monthly income that you calculated in step one, month by month. Alongside this you then want to note down everything that your money is being used for.
It’s important that you pay attention to this step as neglecting to include something could short change you later in the year and you may find your financial supplies running dry.
Typical examples to include:
School books, groceries, rent, electricity/gas bills, internet, clothing fund, TV license, entertainment.
All of the above may not apply to you, but these are the type of things that you should aim to be including. Try to allocate an amount that you will be spending on these each month. Once you have completed these steps you should (hopefully) have some disposable income left.
Try not to dry up all of your expendable cash, as it’s important to retain money as an emergency fund. You never know when you’re going to need this and it’s best to be prepared and account for this in your budget if possible.
Now that you’ve set up budgets, you need to know how to save.
Step 3: Subscribe to money saving sites
These will often give tips on money saving and bargains, as well as links to downloadable coupons that you can print off and use in various food stores, this is invaluable if you’re looking to save some cash.
Step 4: Buy in bulk
Buying in bulk is great for saving money, the more you buy the more you save. If you can share your weekly shops with flatmates you’ll find yourself reeling in the discounts.
Step 5: Drop the luxuries
Instead of going out to the movies, host a movie night on campus in your dorm, invite your friends over and buy a few cheap drinks and snacks. This is a great way to meet new people, a fantastic opportunity to socialise and you save yourself from being a subject to extortionate movie prices!
Partying is good fun but you should limit the amount you do, especially if it involves alcohol and you’re not of drinking age. Many students make the mistake of indulging in this during their time at college and are often sorry for it when they receive their credit card bills and overdrafts.
Last but not least…
Ask yourself: “Do I need it?”
If you’re ever in doubt, seek help from an adult, your parents or a college official. Most colleges have financial advisers in place that are more than happy to help you design budget plans and stick to them; it’s their job to assist you.