How Can I Learn About Money And Budgeting?

Many college students have financial struggles at some point or another and for a variety of reasons such as being poor, living away from home without support for rent, utilities and transport, new responsibilities and time obligations of school, and new expenses such as tuition, books, technology and learning supplies.

Whatever your challenges, it’s important to educate yourself on financial strategies and systems that will help you support yourself, your family, and achieve your goals.

THE GOLDEN RULES OF PERSONAL MONEY MANAGEMENT

Spend Less Than You Earn 

There is a lot of pressure on all of us to spend, spend, spend. The more we consume, the more we belong or appear to belong. Social status that is defined by material expressions like fashion and possessions is designed to keep us financially disempowered. How much money you have and how much you spend on superficial things does not define who you are as a person. Most people get into financial trouble because they spend more than they bring in. 

Make a Realistic Budget

  • Read Darreonna Davis’ great tips in An Easy Guide To Help College Students Set Up Their First Budget;

  • Use this fillable budget form to create a realistic picture of how much it costs you, right now, to live your current life.

    • If you aren’t paying for all of your own bills or expenses, find out how much your portion of rent, food, utilities or other costs and enter them into the form. If someone else is helping you pay for anything in your life, add up those costs and add that same amount to your “income” section so you can see how much income you’d need to earn to pay for everything yourself. 

Plan For The Future

Illnesses, retirement, vacation, big life changes will cost money and may be unexpected. Plan for the unexpected. We know; it’s difficult to think about the future when you’re not even sure how you’re going to get through the week or the next year. Here are some things to think about:

  • Enrolling in a college or training program, getting work experience through a job or an internship, are all ways to set you up to earn more money over your lifetime;

  • Paying yourself with free money (financial aid/scholarships/achievement awards/community funding) will help you avoid educational debt from loans or credit cards;

  • Set income and savings goals so that you can save 10-20% of all income in a separate account as your “emergency fund;”

  • Learn about investing small amounts via direct deposit into retirement funds that will earn interest over your lifetime, and set you up to have money later in life to use for housing, education, and living expenses. A little bit now will earn a lot for you later.

WHAT HAPPENS IF I GET INTO FINANCIAL TROUBLE?

People often don’t admit to themselves that they have a money problem until it becomes unmanageable. Here are some warning signs of sliding into financial trouble:

  • For two or three months in a row, your budget is unbalanced because you’re spending more than you are bringing in;

  • You’ve begun using your savings for regular living expenses you thought you could handle with your regular budget;

  • You’ve missed a deadline for a bill or are taking credit card cash advances or overdrawing your checking account;

  • You have a big balance on your credit card and have paid only the required minimum payment for the last two months;

  • You have nothing in the bank in case of an emergency need;

  • You don’t know how much total debt you have;

  • You’re trying to cut expenses by eliminating something important, such as dropping health insurance, a car payment, or not buying necessary items for school or work.

Ask For Help

If you are experiencing any of these warning signs, first acknowledge the problem. It’s not going to solve itself—you need to take active steps before it gets worse and affects your school or work performance. The first step is to admit that you need help and ask for it. 

  • Start by speaking with a mentor, community leader, counselor or the financial aid office at your school; if they can’t help you directly, they can refer you to someone who can;

  • Take your budget and other financial records with you so that they can see what’s really involved; 

  • Ask if your college or training program may offer classes or counseling on budgeting or financial management;

  • Seek out scholarships, grants, and community resources to help you pay yourself to go to school. Here’s an article that will help: How Do I Pay For College?

Think Before You Spend

  • Be aware of what you’re spending. Carry a small notebook and write down everything you spend for a month, or keep a running list in your phone. 

    • Notice your habits (where and when you spend money) and be able to make a more realistic budget to take control of your money;

  • Look for alternatives to getting your needs handled for less money. 

    • If you buy a lot of bottled water, for example, you may feel healthier than people who drink soft drinks or coffee, but you could carry your own refillable water bottle and pay nothing;

    • Submit your creative work to school competitions if they offer gift cards or bookstore vouchers as awards;

    • Many schools have free lunch or income-based food security programs, apply to them;

    • Pack lunch and carry snacks with you to avoid the cost of eating out.

    • Share streaming subscriptions with friends, roommates or family members;

    • Buy generic products instead of name brands;

    • Shop at thrift stores and yard sales;

    • Pay with cash instead of a credit card to keep yourself from spending what you don’t have;

    • Cancel your health club membership and take PE courses or use the school gym instead;

  • Plan ahead to avoid impulse spending. 

    • Make a list before going shopping and stick to it. Shopping without a list usually results in buying all sorts of unneeded (and expensive) things that catch your eye in the store;

    • If you can wait a month to purchase an optional item, or make a large purchase. Then mark your calendar and wait. Ask yourself on the future date if you still want or need the item;

    • Shop around, compare prices, and buy in bulk;

  • Avoid ATM fees by finding a machine on your card’s network (or change banks). Avoid checking account monthly fees by finding a bank with free checking;

  • Look for free fun instead of movies and concerts—many local communities and colleges have frequent free events;

  • Make it a habit to conserve electricity, water, and gas. Don’t leave the a/c on when you’re not home, lights burning or your computer on all night;

  • Do your best to avoid failing a class, or taking classes you don’t need. See an academic counselor every time you register for classes. Paying to retake a course or taking courses that don’t help you progress are quick ways to rack up unnecessary school costs.

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moneyDyana Valentinemoney, budgeting, paying for collegeComment