7 Budgeting Tips for the School Year
The price of college can go beyond just tuition—living expenses and additional school costs can really add up. Quickly. This is why brushing up on some financial education tools can go a very long way when it comes to managing your college-related expenses. One of the most important skills you can develop is the ability to create and stick to a budget. Let’s look at the 7 ways you can take control of your financial future, starting with budgeting tips for the school year:
1. Plan Ahead
The art of building a budget is understanding your income, fixed expenses, 529 savings plan and flexible expenses.
- Income is the money you have coming in from sources such as financial aid and family.
- Overestimate your expenses to give you some wiggle room in case of unexpected costs that may come up in the future.
- Underestimate your income to be on the safe side when it comes to income adjustments that may occur—if you earn more than you estimate, all the better.
- Fixed expenses are costs that generally don’t fluctuate, such as rent, tuition and a possible car payment.
- Flexible expenses such as groceries, utilities and entertainment costs are variable based on your spending habits. For example, if you eat out at restaurants nearly every day your flexible expenses will be much higher than someone who regularly cooks at home.
Once you’ve calculated your total monthly expenses, you can subtract it from your income. Time Magazine’s list of 12 Hidden College Expenses can help familiarize you with some additional costs you can expect. Ideally, after subtracting your expenses from your income, you’ll have some money left over that you can then use to build an emergency fund. (We’ll look at emergency funds later in this article.)
Finally, if you have a suitable emergency fund and still have a surplus, you can consider investments. This is a page right out of the . As you can see, it’s more important than ever for students to understand their finances.
2. Understand Wants vs. Needs
To make sure that your expenses are kept under control, you should discriminate between wants and needs. Our needs include everything required to study effectively and live in good health. Our wants are things that might be enjoyable but aren’t absolutely necessary. It’s not always easy to be honest about wants versus needs, but the right perspective may make a huge difference in your financial well-being. If you really want something, consider if you will still be happy with “the thing” one month from now. Having the latest and greatest isn’t always worth breaking the bank!
3. Know Your Financial Aid Options
A 2018 survey of over 1,000 college students, sourced from Fulcrum by Lucid and sponsored by Ascent, showed that nearly half of students with student loans report they are shouldering more responsibility for college costs than they originally anticipated. The study also revealed some significant gaps in understanding student loans relative to college financing options. Ascent Funding is the only student loan provider that incorporates into the loan process as a way to help students understand the various financial opportunities like cosigned student loans and student loans with no cosigner.
4. Shop Smart on Supplies
There are many ways to save on school supplies such as textbooks. Utilizing your school library, buying used and using e-books are options that may significantly reduce your textbook expenses. Many courses offer online platforms such as McGraw-Hill Connect that have affordable access fees. Utilize the resources that match your learning style and allow you to thrive.
5. Bulk Up on the Basics
Buying your basic needs in bulk is another way to save on the cost of supplies. You know that you’ll need notebooks, paper and pencils, and these often cost less if you buy them in bulk. Shopping around and researching reviews may help you get a sense of what good deals look like. Check out Budgeting for College Students: Where to Start for some more tips on weighing your spending options and managing expenses.
6. Prepare for the Unexpected
Having an emergency fund can save you from worries, and may save you from financial hardship as well. An emergency fund is typically used to protect you from unexpected expenses or from loss of income. When you have one, you may avoid the risk of running up credit card debt in the event that you have an uninvited cost of some kind. For more information on emergency funds, check out NerdWallet’s Emergency Fund Guide.
7. Utilize Your Resources
It’s important that you understand and utilize the resources available to you as a student. College is an investment that can unlock many opportunities for your future, so it makes sense to know your options when it comes to college financing. Ascent is determined to help educate students about their financial future. Contact us or check out our student FAQs to learn more.
Ascent Funding sponsors these blog posts and creates informational content that is of interest to prospective borrowers and our applicants.