Surviving the Financial Highs and Lows of Your College Years
Sep 13 '01 (Updated Jan 28 '06)
The Bottom Line Managing a college budget can be a challenge, but it's completely within the abilities of every one of us, if we stick to a disciplined plan.
Surviving in college can be a true test of personal determination and will. Studying and time management are important, but they are only a part of the college success puzzle. One other important factor is, to some, the most critical of all. It's the ability to properly budget and manage your personal finances.
Let's face it, most students who enter college have little or no experience at all when it comes to money. Most students spend their teen years under the care and guidance of parents. So, when these students enter college for the first time, they are often unprepared for the financial challenges that lie ahead.
Preparing Your Budget:
You should begin your budget plan by assessing your current situation. What is going to be your primary source of funds? Are you going to live off of a personal savings account? Are your parents going to send you an allowance? Or, are you going to have to support yourself through employment?
If your answer to the above question is either savings or parents, then you will have a fixed amount of money to deal with. This amount could be pre- determined by the generosity of your parents, or by taking your savings balance and dividing by the number of weeks that you will be in school for the year.
If you have to work while you're in school, then you are not as limited in your potential income and spending. You won’t have as much free time, but you will be able to increase your spending by working more hours, assuming that your employer will give them to you.
What are Your Minimum Needs:
You should always start with the basics. The most critical item to budget for is, of course, food. If you already have a prepaid meal ticket, then you will only need to worry about paying for snacks. Without a meal ticket, you will need to budget for all of your food.
Next, you need to determine what other basic minimums expenses will need to paid, in order to live and survive. Other expenses could include phone, utilities, rent, cable, gasoline, health care, etc. This is going to depend on whether or not you live in a university residence, or in a private residence. Most all university halls and college- owned houses include the utilities in the price that you pay up- front, for your rent. If you live in a privately owned house, then you could very well have to budget some money to pay for utilities yourself. My advice is to find a place to live that covers these types of expenses for you. It will make your housing more expensive up- front, but I think it’s the best way to go for two reasons. First of all, if you live in a university owned residence and you are eligible for financial aid, then you will probably get an increase in aid, to cover the cost of housing, because it will be included in your overall university bill. Second, you will save yourself the stress of having to pay these extra bills yourself because it will already be included in the cost of housing. You will already have enough stress with studying. You don’t need the added tension of wondering whether or not you can pay your heating bill.
Once you have determined the minimum funds needed to survive, you can then plan your personal budget. You should try to add some additional funds, for personal spending, entertainment, and unexpected expenses.
Putting Together a Plan:
Now, it's time to prepare your college budget. Let's use an example. We will assume that you are going to live off of a savings account with a current balance of $2,000. You have a meal ticket, and you live in a university owned residence hall. The school year is 40 weeks in length. You assess your personal situation, and you decide that you need the following money each month:
Snacks: $60.00
Long Distance Calls: $20.00
Cable: $20.00
Entertainment & Miscellaneous: $100.00
Using this example, the total monthly cash requirements would be $200.00. The school year is 9 months in length, so a total of $1,800 would be needed. In this example, the $2,000 in savings would therefore be sufficient and there would be $200 to spare, at the end of the year.
For other students, the situation can get more complicated than this. Those who have to work, and/or live in non- university housing will have more factors to consider. These individuals might have utilities to pay, on top of the other debts mentioned above. And, in the absence of a meal ticket, the student's food budget would increase substantially, probably up to a minimum of $120.00 per month. You can reduce your food expenses by buying food at the grocery store, rather than eating out all the time, and by purchasing food in bulk, whenever possible. Even those who only need to worry about an occasional snack would be smart to purchase a large amount of snacks from the store, rather than pay the premium price from a vending machine. Just make sure you have a safe haven for your snacks, because food theft is a very common occurrence at colleges.
Final Thoughts:
Budgeting money is important for the student, although it can be much easier for some than for others. When I was a student, I spent most of my years living in university owned houses, so there was no worry about paying for utilities. We had a cable and basic phone bill to pay each month, but the costs were divided by 6 roommates, so they were very low. I spent one year living in a house that was not university owned, and we had to pay our own utilities. Believe me, this was not fun! Not only did it cost a lot of extra money, it also caused arguments among the house members, concerning how warm the thermostat should be set. The more cost- conscious roommates wanted it set low, like at 65 degrees. The others wanted it set higher, around 70. We even argued over the use and expense of paying for electric space heaters and other appliances, which added stress on top of stress (The bad situation was compounded by the fact that I lived with, as my friends often called them, “a bunch of conservative wackos”… read my epinion from Dec. 18, 2000, under the category titled “What Should I know about dealing with college roommates”, for more info on this subject). If I had to do things over, I would never have lived in a house that didn’t include utilities. It was a big mistake!
Except for my initial year in school, I didn't have a meal ticket. I had to buy all of my food myself. To stretch my money as far as possible, I shopped for the least expensive and most filling foods I could find. That meant that I spent most of my days eating pasta products, along with bread and butter, to make me feel more full and to help my food supply last longer. I pushed myself to the limits, spending only about $20 per week, on food (this was in 1986). Later on, I decided to work in the college cafeteria. This included free food, and it really helped make my life easier. Looking back, I should have worked in the food services every year, when school was in session, just to get the added benefit of free meals.
Whatever your financial situation allows, it's imperative that you make a budget and stick with it! There will be many temptations along the way to spend more money than you have budgeted. You can do this, but you will need to compensate by reducing your budget for the following weeks, to make up for the excess spending. If your money runs out too soon, you can call on your parents for assistance, start working (if you’re not already doing so), increase your work hours, or use debt. I recommend exhausting all resources and options, before you allow yourself to accumulate debt. You should avoid the temptation of credit cards, whenever possible.
Managing a college budget marks the first time, for the majority of students, that they have to be responsible for handling their own finances. It can be challenging at times, but if you write out a solid budget plan, and stick with it, you should have no problem at all in your quest for college survival.
For More Educational Reading, Click on the Links Below:
Advice on College Admissions:
Choosing a College or University
How to Help Your Child Choose a College
How to Apply to College
Should I Transfer Schools?
Should I Take Time Off?
Should I Go to Grad School?
Advice on College Life:
College Survival Tips
What is College Really Like?
What I Should Know About Dealing with College Roommates
What Should I Know About Greek Life in College?
What I Should Know About Alcohol Abuse in College
What I Should Know About Spring Break Planning
What Should I Bring to School
How Can I Succeed in College Academics?
How to Manage Your Time
How Should I Deal With Tough Times in School?
How Should I Prepare for Life After Graduation?
Advice on College Finances:
Should I Take a Part Time Job?
How to Pay Off Student Loans
How to Negotiate Financial Aid Packages
How to Apply for Financial Aid
Reviews of Test Prep Materials, Services, and “How To”:
800Score.com
How to Take the GMAT
How to Take the GRE
What is the GRE?
Kaplan GMAT On- Line Course
Princeton Review GMAT On- Line Course
Reviews of Specific Universities:
Wright State University
University of Dayton
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