So now that Financial Aid and recent paycheck has direct-deposited funds to your checking account, it's time to go on a spending spree, right? Time to shop for new furnishings for the dorm, new cell phone, new computer, new clothes, new tunes, snacks, and sodas! Not so fast...
For many students, attending college is the first experience living away from home. Students can easily be tempted to spend their entire semester of student loan funds or college money from parents before the first week of classes.
How can you make sure this doesn’t happen to you? You can get on a budget – a budget means YOU tell your money where to go, instead of wondering where it went.
Keep reading to find out more…
Myth vs. Reality
So of course you have heard or perhaps even believe the myths about budgets, let's crush those with a little reality!
- MYTH: I don’t need a budget – I’m just a college student.
- REALITY: If you don’t’ start telling your money where to go now, you’ll always wonder where it went. This is especially true if some of your money comes from loans or financial aid.
- MYTH: A budget will make me feel restricted.
- REALITY: Nearly everyone who puts themselves on a budget claims they felt like they got a raise AND experienced more freedom with their money.
- MYTH: I use credit cards, or have irregular income, I can’t budget.
- REALITY: You have to budget more than anyone else! There are ways to create a budget around irregular income, and credit cards. We can show you how!
What Does Budgeting Do?
So what exactly does budgeting do? To answer your question, how-about some
- You’ll find more cash
- You’ll actually feel more free
- You’ll watch debt and spending more effectively
- You can save up for large purchases
But how? We can answer that too!
How to budget:
- Add up your monthly income
- Track all your spending for a month (yes, that means keep ALL receipts)
- Then, WRITE DOWN a sample budget
- If it’s not written down, it doesn’t exist!!!
- Test your budget for the month, if it doesn’t work, readjust it!
- Create a budget in which your outgo=your inflow, also known as a zero based budget.
If you're like me you probably want the easiest solution, in that case check out
- CashCourse (Desktop)
- Mint (iOS, Android, and Desktop)
- Personal Capital (iOS, Android, and Desktop)
- YNAB (iOS, Andriod, and Desktop)
#1 Rule – Living Within Your Means
The number one thing that will help you budget is a single simple rule called Living Within Your Means.
It definitely sounds like common sense, but what is it? Living within your means is simple: spend less money than you make. Many students, however, believe that managing their cash or budgeting is hard. It's not! Try this easy exercise:
- Take out a sheet of paper and draw a line down the middle.
- Put "Income" on the left side and list all sources of cash coming in. This can include your financial aid funds, monthly income from a job, money from parents, or other sources.
- Put "Expenses" on the right side and list all costs of cash going out. This can include rent, utilities, cellular phone, food, insurance, medications, entertainment, and others.
- Cash management is making sure your expenses are less than your income. This snapshot could help determine if you need to increase your income or reduce your spending habits.
How can Student Money Management Services help?
SMMS can provide KU students the tools to plan an effective budget to gain control of their expenses.
We meet with students one-on-one to help establish a budget, and can work with you to find the best tool for you, and teach you how to use it.