Creating a Budget
While attending college, it is important to budget cautiously and to hold yourself accountable for the financial decisions you make.
You must take into consideration the money you will be making with a part-time job (if you have one) compared to the money you’re spending on necessities and miscellaneous non-necessities. Also keep in mind that you will have to pay back every penny from the student loans you take out, so the refund check you get back from taking a loan needs to be prioritized.
If you build a budget, you can borrow only what you need and you will owe less when you graduate.
Needs vs Wants
When creating a budget consider the Needs vs. Wants information you have collected. You will want to consider your expenses when creating a financial plan.
|Defining Needs||Defining Wants|
When making these decisions, it is best to start sorting out your needs first. There are two main categories of needs, absolute necessities and near necessities. Absolute necessities are things that are important for our basic survival:
Near necessities aren’t essential for survival, but are quite important to function in society. Some of these items are offered to students living on campus, but for those off campus these items are much more important than buying DVDs or a big screen TV.
Just about everything else you can think of falls under the category of want. Some considerations to make when defining your wants would be to prioritize the necessities listed above and make sure you live within your means. For example, food is a necessity but always going out to eat or buying loads of junk food is not necessary for daily living. A cell-phone is a near necessity, but do you need a smartphone? Initially, you may think both are needs, however, identifying these types of items is an aspect of financial literacy.
Also, within certain categories there is usually room to make less expensive purchases. With the food example, instead of ordering pizza you could buy frozen pizza, which will probably be half the price.
Following these suggestions can help you cut costs and live within your means instead of buying unnecessary items that may put you in a financial hole in the future. These suggestions can help you make better decisions throughout your life.
Find out the best time to shop on a Budget
Budgeting can be frustrating and sometimes "impossible", but it is only stressful when it is looked at in a day. Patience is the best way to strengthen your budget. If you take a look at the calendar on the left you can see that certain months have specific deals. This is a way that patience can be a valuable tool for budgeting. For example, if you know that you want a car just wait till September. Don't by a car right after tax returns though! Usually car dealers know you have the addition bonus money, so they raise the prices.
This is a calendar linked from lifehacker.com. This image is only intended for informational purposes.
- Budget Worksheets. More tools to use in order to help you calculate debts, taxes, paychecks, savings goals, and much more.
- College in Colorado Tools
- Budgeting Psychology
Created by Matheus Silva for the Money Matters Video contest 2015