You’ve just moved into your first college dorm and you’re finally on your own. You have dreamt of this moment since the first college brochure came in the mail and it’s finally here. The possibilities are endless, and you can’t wait to let loose and have some fun. For many college students though, too much fun and freedom can lead to massive amounts of debt. With all of the temptations that come with your first taste of freedom, it's important to make sure you’re remaining responsible with your money. Here are 5 quick and simple tips on creating and sticking to a budget in college.
Create a Monthly Budget
Before you do anything it’s important for you to create a monthly budget to follow. ECU personal finance professor, Mark Weitzel, says a college student's biggest financial barrier is often themself. “They don’t realize the importance of understanding their money-how they are spending it, how they are saving it, and for what.” Weitzel does admit it takes commitment to be financially successful, snagging a stable job won’t always set you up for permanent success. He says the first step to saving money is tracking your expenses for a month. Seeing your expenses on paper can open your eyes to the unnecessary spending you succumb to. Next, create a list of all the expenses you have in a month; rent, utilities, groceries, gas, recreation as well as any unexpected expenses you may experience such as an oil change or flat tire. Every month do your best to stick to this number and continue to write down and track your expenses every day.
Meal Plan and Stick to It
Eating out is possibly the biggest temptation college students face every day. Planning your meals for the week is the best way to make sure you’re not overspending on fast food and junk. You can do this by charting in your planner or the notes on your phone every meal you’ll need for each day of the week. A useful tip is to try to see how many meals you can make with the same ingredients. This can be fun and make each meal unique and delicious! Create a shopping list and make sure you stick to your budget while you’re at the grocery store. Aldi and Lidl are great resources for college students to grocery shop on a budget. Sticking to a budget shouldn’t consume your life. Remember to treat yourself to a yummy meal out once a week.
Start Saving Now
I know this may be the last thing on your mind, but your future self will thank you. Weitzel goes as far as to advise college students to start saving for retirement now, “I know that seems a little absurd, retirement is so far off in the future. But the sooner you start, the easier it is. In our [personal finance] class we show students how, for as little as $1/day, they can retire a millionaire.” How great does that sound? Radio show host, author and businessman Dave Ramsay says the amount you put into savings isn’t what it’s about. In his article “The Percentage Isn’t Magic” he says “put every dollar you can squeeze out of your budget into savings until you have $1,000.” Then once you’ve become debt-free you can focus on saving 15% of your paycheck every week.
Shop Smarter Not Harder
You’d be surprised how much you spend just by reaching for name brands and shopping at expensive stores. As I mentioned above Aldi and Lidl are great places to grocery shop. They carry fewer known brands with an equal amount of quality. Just by switching to off-brand products, your grocery bill can be split in half, allowing your dollar to stretch further. Another temptation many students face is shopping for clothes. Fashion is extremely popular and important to many young adults, it’s a way to express who you are without saying a word. But the price of many brands and trends can cost you a pretty penny. Rather than going straight to the brand stores you know and love, try thrifting and searching for good deals on the same items. Or check out the many ECU buy, sell, trade Facebook pages such as Pirate Gals or Pirate Pals. You’ll feel greater satisfaction with those $60 barely used Air Force Ones than the $100 brand new ones on the Nike website.
The best thing you can do to grow your knowledge in any subject is to educate yourself. Weitzel suggests taking ECU’s personal finance class (FINE 1904) and says, “personal finance is personal, and no one is in a better position to decide what is best for you than you. Dare to become more financially literate. With just a few basic concepts and financial tools, anyone can start making better and more informed financial decisions.”
With just a little education and a lot of dedication, you can make a difference in your finances. Take a class, read an article or book, or reach out to a professor or adult that may have some advice for you! Remember you are equally your biggest barrier and your biggest advantage.
Your financial success starts today.