Budgeting tips for college students

Budgeting tips for college students

Mentors, parents and family members often have plenty of advice for students heading to college — especially when it comes to money. Many say they wish they had known earlier how important it is to save when possible, apply for scholarships, compare costs and learn how to manage a budget before expenses start adding up.

You may already have financial goals in mind, such as paying for college, reducing student loans or saving for future expenses. A budget can help you understand where your money is going and make a plan to reach those goals. If you’re preparing for college or already on campus, these budgeting tips can help you build smart money habits now and feel more confident about your financial future.

Cutting costs during college

Besides tuition and room and board, college comes with some extra costs you need to account for. Cutting costs will also free up more of your budget, which will get you closer to reaching your financial goals.

1. Look for free or low-cost textbooks. Before purchasing books, check whether your school, library, professor, or reputable online sources offer free PDF versions, used copies, or rental options. This will save you a substantial amount of money over the years as one new textbook could cost $100 or more.
2. Eat in when possible. Whether you will live on or off campus, buying groceries tends to be a lower cost than dining out or purchasing the meal plan. Consider supplementing a smaller meal plan with simple meals you can cook at home.
3. Take advantage of student discounts. Student discounts can often be found, especially in college towns, for all kinds of things, from entertainment (movie tickets) to clothing and technology. Explore what’s available in your area before making any purchases.
   Pro Tip: School IDs are often required to redeem student discounts, so keep it handy when you go out.

Build a budget in college

Without some sort of budget in place, it’s easier to overspend, lose sight of financial goals and miss opportunities to build healthy money habits early. Creating a budget for your college expenses can make managing your money smooth sailing and will grow your financial confidence after graduation.

Read our article on money tips for beginners to make your budget a reality.

Tips for creating a budget:

1. Underestimate your income by 10% or 15% and overestimate your spending by the same amount to adjust for taxes being taken away from your income and for inflation. This creates a buffer to prevent you from accidentally overspending.
2. Change the settings in your checking account to not permit you to spend more money than you have. This will save you from paying overdraft fees, which can add up quickly if you are not aware.
3. Regularly check your expenses to make sure you are staying on track. Monitoring your expenses also helps you be realistic when budgeting for the next time. After using your budget for one month, recall what did and did not work. Then, adjust as needed.
4. Whenever you are distributing your funds, consider setting aside some money for any big future expenses, like participating in a study abroad program or renting an apartment.

Earn extra money while in college

As a college student, your priority should always be your education. However, if you find yourself with free time and feel that having a side job would help you make good use of that time, consider the following:

• Getting a part-time job. A part-time job can provide a steady income giving you predictable spending. Additionally, campus jobs are often designed around student schedules. Plus, the completing the Free Application for Federal Student Aid (FAFSA) can help you determine whether you qualify for federal work-study opportunities.
  
  Pro Tip: Applying for jobs before the semester starts, when there may be fewer applicants, increases your chances of getting the job.Also, if your schedule allows and your job is open during breaks, take advantage of that free time to earn extra money.
• Profiting from a hobby. Whether your hobby is coding, baking, music or another skill, selling your goods or services can help you earn money while building experience future employers may value. Additionally, doing what you love is already a great use of your free time. Making money out of it is a bonus.
• Becoming a tutor. Use your knowledge of a subject to help other students while earning extra income.
• Becoming a brand ambassador. Companies often look for college students to represent their brands, and many roles do not require a large social media following.
• Doing odd jobs. Use odd job apps to find local tasks, such as grocery pickup or furniture assembly, that easily fit your schedule.
• Selling unneeded items. Sell the items you no longer use to secondhand stores, people you know or online.
• Getting a paid internship. A paid internship can provide income while helping you gain real-world work experience.

To further explore budgeting and other financial topics, check out our free financial literacy website, KEYS® by GM Financial, and the Our Two Cents podcast on Spotify and Apple Podcasts. KEYS covers common basic concepts, like budgeting, and provides financial tools and facts using quick and interactive modules.

By Kera Worobiec

GM Financial