Budgeting is one of those adult things that you just can't avoid. However, with a solid budgeting plan and some helpful budgeting tips, you can make every expense and save for the fun stuff you really care about! Here's just a short list of all the ways a proper budget can have a big impact:
Budgeting isn't magic, though, and setting up a budget can be complex. In this article, we'll discuss how to pay for living expenses while in college by building a great student budget.
Planning and saving for every single expense would be exhausting. Instead, creating a budget with common incomes and expenses for college students saves time and energy, plus it keeps things organized.
Once you have a general idea of your income and expenses, developing an accurate budget will be much easier. Don't stress if the numbers aren't 100% accurate! A general estimate will be just fine.
Alright, let's get started! There are many different ways to budget. You could:
The important thing is to find a system that you can actually stick with.
A budget that works for you will help you establish financial stability and set you up for future success. Let's do a deeper dive into assessing your financial situation and creating a budget that works.
We get that many students have side gigs and variable monthly income, which makes calculating income complicated. However, there's still a right way and a wrong way to calculate your income. Here's the scoop.
First, you've got to calculate your net income. This is the amount of money you earn minus taxes. If you receive a regular paycheck through your employer, the amount deposited into your checking account is your net income.
So if you've just started a part-time job, waiting and calculating your net income after your first paycheck might be a good idea.
Next, if you often work side gigs, then your total monthly income may fluctuate from month to month. You've got two methods of calculating your gig-related income. You can take an average of your paycheck from the past several months and call that your net income.
You can also budget for the 'lowest possible' paycheck. So, think of a month where you didn't get a ton of gigs for whatever reason. How much $$$ did you bring in that month? Well, that's your new 'assumed' income, and any extra can go toward savings or other funds.
This net income figure is your total spending money; congrats!
Next, you'll want to list your monthly expenses. Here are some common expenses college students may have:
You may have other monthly expenses that are unique to your situation. For example, some students have club dues or chiropractor appointments. Think carefully about your expenses and review your previous payments so you don't miss anything.
Have you got a handle on your monthly expenses? Sweet, now it's time to categorize what’s fixed and what’s variable. Here's the difference:
We know it's tough, but you'll need to budget less for variable expenses. Having a roof over your head takes precedence if it comes to having enough money for rent or your gym membership.
A monthly budget isn't just about paying necessary bills, going out on the weekend, or living month to month. You can use your new budget to put extra money into savings for bigger buys down the line. That could be saving for a house, a new car, or longer-term goals like retirement.
Paying back student loan debt usually falls into this category. For federal student loans, payments aren't generally due until after you graduate or leave school, and financial aid may lower them if you’re eligible. However, you can still get ahead on your loan payments by making monthly payments while in college.
This method is an excellent way to save money in the long run. If your budget has the space, start paying on those loans (even a little bit) every month.
Your estimates on spending habits may not be entirely accurate in practice, and unexpected expenses happen.
For the next month or two, carefully track what you spend in each category. Then, compare what you actually spent to what you budgeted. How close are they?
In most cases, you’ll overspend in some areas and underspend in others. You can use this information to adjust your budget moving forward—or to adjust your spending, if needed.
Don't stress if you were off of your estimates! Adjusting your budget is a part of the process, and there's no shame in moving your funds around as you settle into your new plan.
You've calculated your expenses and income, created a plan, and tracked your spending. Congratulations on your shiny new budget!
However, we understand that life is occasionally outside your control, and the life of a college student can be particularly hectic.
So if your budget didn't stretch far enough and your bank account’s a little low, KoraCash can help. With an easy application, up to $3,000 available, and a repayment that may help you build credit, KoraCash is ideal for college students.
At Kora, we help students meet their financial needs and make building a better financial future simple. Download our app and get started!