In college, you likely have limited financial resources so it is important to be mindful and take proactive steps to stay on top of your finances.
1. What Is the Average Cost of College Living Expenses
College begins with fixed expenses such as tuition fees and accommodation, both of which vary by school. You also shouldn’t forget about cable, internet and utility bills. Utility rates will also vary significantly based on area, but cable and internet should amount to an average cost of $585 a year. You should also factor in a similar amount for your cellphone package and $1500-$2500 for health insurance.
Moving on to variable expenses which are not mandatory but come inevitably with your lifestyle choices, the more activities and hobbies you want to have, the bigger the budget that you need. You need to ensure $4,500 for your meal plan on an annual basis, which will change significantly if you decide to eat out or cook yourself. Make sure to reserve approximately $1,200 for textbooks although that figure can go lower if you borrow them or buy second-hand.
You also need to add transport costs which will vary by distance traveled and whether you have a car or take public transport. If you do have a car, you also need to account for gas, insurance, parking, maintenance and possible repairs. You also need to do your laundry at some point which isn’t a big deal but still adds up to $360. A year is a long time so you might need new clothes and beauty products, so it’s important to think ahead so you can plan accordingly and hopefully avoid getting into a pile of debt.
2. Why You Need To Set Up a College Budget
While it’s almost impossible to entirely eliminate the financial concerns of attending college, keeping a budget can go a long way in minimizing stress that is bound to exist within the equation.
It helps you avoid unnecessary expenses
Budgeting helps you separate wants from needs. When things get rough, it will be easier to identify which expenses you can avoid to make the necessary cuts.
It helps you stay healthy
College will be stressful either way but budgeting will provide you with a sense of stability and organization regarding your finances.
It helps you teach valuable life skills
Book smart does not equal street smart. Getting a degree will help you kick start your career but a skill like budgeting will help you build a healthy foundation for a good life.
Fostering a perspective financial future
Instead of racking up debt and wasting money which you’ll need to pay back with interest, budgeting allows you to plan a bright financial future. Think of it as a roadmap to your financial goals which will also help you protect your credit score.
3. Financial and Savings Tips for The New College Student
Developing healthy money management habits will not only save you money through college, but it will also make the transition into the real world easier when you earn your degree.
Refine your budget
Comb through each line of your budget and think of ways how you could save money from each expense. There’s no need to stop with wants as we can often trim essential costs as well. For example, you could compare electric rates in your area to ensure you have the most affordable rate which will save you a significant amount of money every month. If you adopt a few energy-saving habits such as washing your clothes in cold water, you will save even more.
Bring your student ID everywhere
This is your most precious asset while at college as it will provide you with discounts and better deals for pretty much everything.
Consider loans as your last resort
Look for scholarships, grants and even part-time or full-time work, but don’t fall in the trap of loans unless you don’t have a choice. Student loans won’t only make it harder for you to get a mortgage someday, they will make your life much harder than it has to be, period.
Takeaway
Despite hefty workloads, long study nights, and unstable finances, college is a wonderful and once-in-a-lifetime experience. While at college, you’re still well insulated against some of the most significant financial responsibilities you’ll face as an adult so use it as a mock-exam of the life that awaits you after you graduate. Developing good money skills while at college will not only make the real test much less difficult, but it will also improve your odds of attaining a good score.
