Setting a Budget for the Remainder of Your College Career

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counting quarters when budgeting

Welcome to adulting! It seems fun at first, but it’s also pretty risky. There’s a lot that can go wrong — especially with your money while you’re in college. The best way to protect yourself from debt or pesky fees is to set up a budget.

Here’s how you can make the best one possible in just a few easy steps:

  1. Gather Your Supplies

Before you get started, you’ll need your paperwork. Get a hold of a copy of every bill you pay regularly. Some frequent ones include your car insurance, phone, credit card, medical bills, debt to your parents, gym membership, Netflix subscription, etc. If you live in an apartment, bills would include your rent and utilities.

2. Categorize Everything

Then, if you use a debit or credit card, look at your complete spending statements from last month. Write it all down or print it out so you can categorize it. Our most common categories include Housing, Phone/Cable/Internet, Transportation, Food, Lifestyle, Entertainment, Insurance, Debt. Giving, and Savings.

Take those receipts or statements from your bank and start to give everything you spent a category. Eating out goes in Entertainment. The shoes you bought is classified as Lifestyle. Your credit card bill is in Debts. Do this until you’ve got a full picture of every dollar you’ve spent over the last month.

making a budget spreadsheet

3. Look at Your Income

Next, look at your paychecks, as well as any extra regular money you make from side jobs like babysitting or allowances from your parents. This is defined as income. If it’s not steady (say you work hourly or get tips), round down an average to be safe.

Compare your income and your total spend from last month. Does it cover your bills? If yes, then you’re doing great and proceed to step five. If not, move on to step four.

4. Get a Reality Check

Overspending in college is a huge issue and we rarely fail to see it until it’s too late and we’re short on cash. Now that you know you’re in the red, you need to act. Go back to those categories and see what you can cut. You can probably do without daily coffee or another new outfit in your closet every single month.

For example, if you’re consistently short $100, take $10 off of each category or cut out your shopping habit altogether. Can’t cut anything? Time to make more money with a side job or extra hours!

5. Give Yourself an Allowance

One great way to keep yourself within your budget is to ditch the cards and go cash only. I know — crazy! But it works, especially for overspenders! Having cash will make you think twice about those splurge night outs. And it will help you visualize your money. Use envelopes, clips, or even dividers in your wallet for your categories.

If you’re not comfortable carrying large amounts of cash, you can set up checking bank accounts or a reloadable Visa gift card for your big spend items (like eating out or shopping).

Start saving, even if it is just a piggybank!

6. Be Wise With the Extra

Now is the time to pay down your student loans. If you pay while you’re in college, even a small amount monthly, you’ll save HUGE on the amount owed when you graduate. No student loans? Get investing! Open a Roth IRA or Traditional IRA and save for retirement. Or open a traditional savings account and save for that future expense like a new car or your study abroad. When you know how to budget, you can afford to treat yourself.

Taking the initiative to establish a budget while still in college is one of the most important money-conscious actions that you can take. If you can abide by a stricter budget while in college, it will be a breeze post-graduation. Not only will you feel like a million bucks by having your finances under control, you will be well on your way to saving that million!

Find a Scholarship – Even as a College Junior!

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undergraduate-scholarships

You’re just over halfway done with college — but that doesn’t mean you can slack on scholarships now. As we all sadly know, college tuition is pricey, and carrying that debt after graduation may affect your entire life. But by being proactive and seeking out scholarships every single semester you’re enrolled, you can help keep tuition costs manageable. This roundup features just 6 of the many scholarships out there college juniors can win along with advice on how to score even more!

 

Beinecke Scholarship Program

Open to U.S.-resident juniors enrolled in arts, humanities, and social studies, this scholarship is actually intended to help fund your graduate degree for up to five years! The program awards 20 scholarships, but you must be nominated by a representative from your college. Check with your advisor to see if you are eligible or visit their site.

Keynote Scholarship

Awarded by the National Space Club, science, technology, engineering, and mathematics students could be awarded at $10,000 award to help them pursue a career in STEM fields. Winners will also be asked to speak at the annual memorial dinner (a massive honor for science geeks). You can apply online and upload your video component here.

Course Hero Midterm Scholarship

Course Hero, a site for tutoring and study guide programs and books, is in the scholarship game as well. You can apply monthly to be entered in for a $5,000 scholarship based on an answer to a short question. Most of the deadlines are mid-month, but you can always learn more on their scholarship site. If you don’t win, check around the Course Hero site for other scholarships, such as the $10,000 Academic Hero Scholarship.

GEICO Achievement Scholarship

Business, computer science, mathematics, or similar majors with a GPA of 3.0 and a list of accomplishments in their communities (such as volunteering) or campuses (such as president of a fraternity) should certainly apply for insurance company GEICO’s yearly award. Only open to sophomore and junior college students, you have more chances of winning the $2,500, but be quick — the deadline is November 17!

Eraser Clinic Laser Tattoo Removal Scholarship

Do you have a tattoo you regret or a story about another person’s tattoo mistake? Eraser Clinic wants to hear from you! Probably one of the stranger scholarships out there, you just need to be majoring in a science related field (including pre-medicine, nursing, engineering, etc.), have a 3.0 GPA, and be willing to share your stories about tattoo removal by the deadline of November 30 or the second deadline at the end of June 2017.

Mellon Fellowships for Dissertation Research in Original Sources

Juniors majoring in humanities and social science fields who are interested in a particular research field can get help paying for their work via the Council on Library and Information Resources. While amounts vary, you could receive one of 15 scholarships to complete your project using original or little-used sources. This scholarship is perfect for those loving viewing old letters or reading through stacks of old books! Deadline for this year is December 2.

College-Specific Scholarships

We cannot neglect to discuss where the majority of scholarships can be found — your own campus! Many colleges have offices, advisors, or individuals that handle scholarships available to their students. Your best bet is to find this person and become best friends with them. Tell them about your major, accomplishments,and activities, and make it known you need financial aid.

To save time, have a general essay prepared, along with some recommendation letters from your professors or activity advisors. It will help you apply for more scholarships like the ones above faster.

 

How to Start a Budget in College

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As a recent graduate ready to step into adulthood, you’ll find college is the best time to start working on your financial knowledge. To start, you need a budget! Whether you make a few bucks at your student job or if you have no bills to pay, having a budget can teach you how to manage your money and prepare yourself for later in life. Not sure where to begin? Here are the first steps you must take when starting a budget in college.

 

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Step 1: Collect the Evidence

Here’s your first challenge: for one month, keep every receipt, every pay stub, every bill, and collect it in one place. If it uses money, you keep it. At the end of the month, you will use this data to help you set the groundwork of your budget. Just be sure not to change your spending habits. You want this month to be as accurate as possible.

Step 2: Lay Out the Income

Add up last month’s spending numbers, and write down how much you brought in (after taxes) in a spreadsheet or piece of blank paper. This number is your “Income” – highlight it in yellow or another cheery color!

 

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Step 3: Record Your Bills

Next, go through your last month and look for necessary bills. These may include a credit card statement, car insurance and gas, or rent and utilities if you live off campus. Write down the name of the bill, when it was due last month, and how much it costs. Then, total it all up at the bottom of the line and label it as Must Pay!

Step 4: Track Your Additional Spending

Just like you did with your bills, make another column and write down the name of what you bought (or a nickname like “Dinner Out with Jane”) and how much each item came out to be. Add everything together and label it as Additional Spending.

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Step 5: Do the Math

Take the amount from your Additional Spending and Must Pay and subtract it from your Income. This is the amount you have leftover.

Step 6: Savings Plan

Let’s say you have money left over after you’ve completed Step 5. We suggest using that money by dividing and conquering. Split the amount in three: one part goes towards your savings for a trip or a non-essential purchase, one part goes towards paying more than the minimum towards your bills (or towards your student loans if you’re paying early), and the other could go in a retirement account.

 

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Step 7: Getting Out of Debt

What if it’s the other way around, and your bills add up to more than what you make? Now that you know what the damage is, you can do one of two things — spend less or make more. Sometimes cutting back on eating out can do wonders while other times you may have to get a second job, such as grabbing babysitting hours to make the bills. Whatever you do, just don’t stop paying bills or rely on credit cards to get you out of debt. You’ll only end up worse than when you started.

Step 8: Replicate

Every month, sit down and repeat these steps with the new numbers from the previous month. If it’s too much work, consider using pre-made budget spreadsheets or tech like Mint.com that tracks your spending for you. With practice, budgeting and spending your money wisely will come easy to you!

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Parent’s Corner: 6 Steps to Help Your Student’s Finances

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Freshman year is the first time many college students are forced into independence. This includes managing money, planning budgets, monitoring student loans, and setting up a solid financial foundation. Here are several steps parents can take to ensure their students’ financial success and prepare them for life without mom and dad.

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1. Have Them Fill Out Yearly Paperwork

Many parents of college students take it upon themselves to fill out important paperwork like FAFSA applications, taxes, and scholarship forms. While this ensures it gets done, it doesn’t show the student how or even why they need to process these forms.

If you’re not ready to let go of control completely, set up a time for both of you to do the paperwork together. Go through each question and explain your answer. You can even do this with an accountant. Let the student ask questions and encourage them to take over when they start to figure it out.

2. Help Formulate a Budget

Helping your student formulate a budget opens the door for a teachable moment. There are some very simple budgets out there that can be managed online (Mint.com) or via a spreadsheet.

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Another option is to show them how to do the envelope method. The student cashes out their paycheck (or allowance check) each pay period, then divides their money into envelopes for each of their expenses. For example, a $500 paycheck may be divided into 5 envelopes: $80 for gas, $100 for car insurance, $50 for school supplies, $100 in entertainment, and $170 in savings. This way, they can see just how important it is to pay off necessary bills first before “paying” themselves.

3. Set Up Independent Bank Accounts

A bank account is only worth it if the student can access it easily and maintain it on their own. If your student is studying away from their hometown, be sure to set up a bank account as soon as they reach their new school. Many medium and large size colleges now have banks that operate inside the campus making them an attractive and convenient choice. They also typically provide student bank accounts which are low on fees and easy to understand.

4. Make Savings a Priority

And don’t forget to set up a savings account as well! Teaching students about savings now will help them understand the importance down the road. Many times, college students are so focused on what comes next that they don’t process the cost of retirement or even small emergencies like replacing a car or going to the hospital.

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The savings account should be the first step, as well as budgeting for savings as another. You can also consider gifting them books on saving in college that breaks down small steps they can take now. If you’re knowledgeable, help them understand the difference between retirement accounts as well as investment options. It is never too early to instill financial literacy.

5. Check In Regularly On Student Loans

Finally, don’t forget about student loans. If your student needed them to pay for college, they most likely have forgotten about them (or pushed it out of their mind). When they are home from break, take a night to log in to their online account and show them how much interest has accurred. Encourage putting some of that money from savings into the student loan account or to set aside a part of their personal budget to pay down the debt despite them being a student.

 

These are just a few of the steps you can take when talking money in college. By understanding the basics of financial management and having honest and open discussions about the future, your student will be on the road to financial success.