Why Budgeting is Important when you Start College
Starting college is a big deal, after all, you’re about to begin a whole new stage of your life. Unfortunately, many people forget to think about the financial consequences of studying. While getting a degree is very beneficial, there are millions of people with student debt who would probably tell you that they would love to have done things differently.
When you’re young and studying, you’re probably not too concerned about budgeting. But the choices you make now will have a massive impact on your quality of life when you’re in the workforce. Here are some ways you can budget when you start college:
Create a Budget
It’s not enough to have an ‘idea’ of what your budget consists of. Instead, you need to know exactly what’s coming in and what’s going out. Make a list of all of the bills and expenses you must pay each month.
Dedicate at least 10% of the remaining money to savings. This will help you in the event that your car suddenly breaks down or something else unexpected happens. If you’re planning to go away for Spring Break, or think you may need a new laptop at some point, increase your savings each month so you can pay for these expenses without using credit.
Track your Spending
When you’re busy studying and socializing, it can be easy to go over budget without realizing it. Before you go out, review your finances, set a goal for the evening and stick to it! Find apps that can help you save and that can send you reports and alerts when you overspend.
Watch your Credit Score
It’s easy to get into credit card debt when you’re in college. However if these debts aren’t paid on time, your credit score will be impacted. Having a low credit score can impact your employment, whether you can get an apartment, and even how much you’ll pay for utilities and car insurance. Now’s the time to get into good habits. Make sure you’re not utilizing more than 30% of your available credit at any one time. Always make your payments on time, paying at least a little more than the minimum payment required. If you can’t afford something, don’t just ‘credit and forget it.’
If you’re in a real bind and cannot pay even your minimum credit card payment for a particular month; find a loan that can help. Do keep in mind, however, that fast payday loans must be paid back within the next few months. Add this payment into your budget.
Find Free Activities
Your college years can be some of the most fun and exciting, this doesn’t mean they need to be the most expensive! Spending time outside is a great way to relax, be happy and save. Plan a picnic with friends, play volleyball, go for a hike.