Preparing for College: Tips for Creating a Budget
When stepping into college, it’s essential to learn how to manage money to avoid financial stress. Candyce Keys of Arvest offers practical advice to guide students through setting up a budget that fits their lifestyle and goals.
Step 1: Know Your Income
Start by tracking your income, including paychecks and financial aid. This helps you gauge how much you have to spend each month. It’s crucial to include both fixed and discretionary expenses to make informed revenue management decisions.
Step 2: Track Expenses
Identify your mandatory monthly spending, such as rent, bills, and class materials. Subtract these expenses from your income to determine how much is left for fun activities and savings. Tracking expenses will help you allocate funds effectively.
Step 3: Create a Weekly Allowance
Determine how much you can spend each week. This should cover required expenses as well as leisure activities. By setting a weekly limit, you’ll stay on track and avoid overspending.
Step 4: Monitor Spending and Adjust
Continuously track your spending using tools like online banking. Compare your spending with your budget regularly and make adjustments based on any discrepancies. This ensures you stay aligned with your financial goals.
Step 5: Revisit and Refine
Budgets are not static. Life is full of changes that impact your spending. Regularly review your budget to adjust for these changes, ensuring it always aligns with your current income and goals.
For Example, Avoid Impulse Spending to Achieve Long-term Goals
- Weekly track items you think you want to buy but can delay, like music downloads or expensive clothing.
- Calculate the amount you saved each month by asking yourself what expenses you can cut back on.
Boost Your Savings
- Consider opening a savings account for future purchases, like a car or a trip.
- Marshall extra income from a second job or bonuses towards repayments to save on interest in the long run.
Tips for Student Loan Borrowers
- Review your budget to adjust spending before making payments.
- Set a payoff goal by choosing a plan that minimizes long-term costs.
- Pay extra when possible to reduce the loan burden.
- Automate payments to avoid late fees.