One of the stereotypes about college students is that they are broke. But when you go off to college, you don’t have to be the same. Creating a concrete financial plan can ensure your financial wellness as you go through college or post-secondary school life.
What to Include:
It’s very important to create a budget, even if you think that your expenses and income may change over time. There are many tools for this, from simple paper and pen to various apps online. First, you need to pick how long you want your budget to be, like monthly or yearly.
Next, start tracking your monthly income. Use your income from the last few months to accurately predict how much you will make in each coming month. It is simart to categorize your income in different categories, like work and financial aid.
Then, you need to figure out your monthly expenses. You will need to find out what you spend every month. This process can be time-consuming, as you may have to go through receipts and bank account records. Don’t forget to include school expenses if you are in college. After finding out what you spend every month, categorize each expense as a variable or fixed expense. Fixed expenses are ones that do not change from month to month, while variable expenses can depend. On your budget, it is also recommended to include savings in your fixed expenses. This is important as you will be saving for emergencies.
Lastly, you need to balance your budget by subtracting your total expenses from your total income. If you get a negative balance, you should look back to your expenses and spend less on less important expenses. Make sure to review your budget every month, and make changes when necessary. Also, don’t give up if you stay a bit off budget, just get back on track.
Written by Allie Chang