How to Set Up and Keep a College Budget «

How to Set Up and Keep a College Budget


Most college students need to take out loans to pay for college, resulting in large debts after graduation. But, college loan debt is a worthwhile investment in the student’s future. Financial problems after graduation usually result from racking up unnecessary debt in college.
Budgeting is an essential tool to keep post-graduation debt down, and personal finance software can help college students keep a budget.

College Budget Mindset
A college budget puts the student in control and teaches financial management skills for success after college. Many younger college students feel peer pressure to spend without thought, and a budget will help these students to determine when they have “fun money” available to spend.
After graduation, college grads are trying to start a career and will be dealing with the reality of monthly bills, perhaps for the first time ever. College students need to keep in mind that debt acquired in college is more restrictive than a college budget because that debt will be eating up income needed to get started as an adult.

Starting a College Budget
Before setting up a college budget with software, determine what college costs to budget for using these resources:

•College freshman need to consult with an experienced college student on what expenses to expect.

•The office of student life or student affairs at the college can give out information on what expenses to expect.

•Track all spending during the first two months of classes, down to sodas and pencils. Record purchases in personal finance software, on paper or in a spreadsheet. Do not spend frivolously during this time just because the college budget is not yet in place.
College Budgeting Software
While there is no specific college budgeting software, there are software titles that work well for managing the college budget:
You Need A Budget is easy to use, costs just $19.95 and has an added perk of teaching the college student sound personal finance principles.

PearBudget Online is great for budgeting and it costs only $3 per month after a free trial.

ClearCheckbook is online financial software that can be accessed anywhere there is an Internet connection. ClearCheckbook also has an option for use on cell phones, and ClearCheckbook is free (although you can make a donation). Set spending limits on spending categories in ClearCheckbook and you have a budget.

College Budgeting Categories
Each of the software packages mentioned above for college budgeting require that the user identify income and expense categories. Here are categories a college student needs to consider:
College Income Categories

•College costs paid directly by parents, or money parents give to the student specifically to cover college expenses
•Part-time job income
•Scholarships and grants
•Student loans
•Money from personal savings
•Money from college savings accounts
College Expense Categories
•College tuition
•College fees: activity fees, parking fees, lab fees
•Books
•Personal care: laundry costs, hygiene items
•Supplies: notebooks, desk supplies, pens, book bag
•Equipment: computer, reading lamp
•Small appliances: mini-refrigerator, hot pot, microwave
•Rent or on-campus housing
•Food: groceries and dorm meal plans
•Transportation: automotive expenses or gas money for friend’s car, bus fare
•Clothes
•Insurance: the student may still be covered by parent’s policy
•Entertainment
Look into the software packages recommended here for college budgeting and follow the guidelines offered to set up a college budget and avoid unnecessary post-graduation debt. Below you will find more resources for college budgeting.

 

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