Six Ways College Students Break Their Budgets

way college students break budget manage money

 

School supplies are hitting the shelves, and that means a new school year is just about one month away. College students head back to start their fall classes in August, so it’s time to focus on money management in college. Parents, if you are sending your children off to college, make sure they have the financial skills to get started on their own. College students, you need to read this! How many of these mistakes have you already made?

 

  1. The first way to break your budget is by not having a budget at all! So, take the time to make yourself a monthly budget. Consider the income you will get from financial aid, employment, and family. Estimate your monthly expenses for rent, food, and other bills. Make sure you have enough income to pay for all of these expenses. Don’t forget to leave a little padding in your monthly budget for the unexpected trip or opportunity. Try one of these budgeting apps to help.
  2. Grabbing a quick bite to eat or jolt of caffeine in between classes adds up over time. Grabbing a drink and snack at Starbucks can easily cost $10. Get in that habit three times a week, and you’ve spent $30. At the end of the month, you’ve spent $120. Pack some healthy snacks from home in your bag. Carry a refillable water bottle and try bringing coffee from home in a travel cup when possible.
  3. Consider the cost per meal of a meal plan. If you live on campus, you are stuck with the meal plan. You should have a choice, however, about how that meal plan is structured. Typically, you can choose a combination of meals and points or dining dollars. Look at the cost per meal of the plan and how many times you really eat in the dining hall. If you don’t use all of those meals each week, you’ll probably be better off with the dining dollars or points. If you do this, however, make sure to budget and keep track of this money so you are not left starving with a month left in the semester.
  4. Even social events need a budget. One of the great parts of the college experience is going out and having fun with new people. Going out, however, is expensive. Buying a new pair of shoes or jeans to go out adds to that expense. Unless your parents are giving you their credit card and an unlimited budget, you need to think about the cost of going out. Limit the number of days you go out (also a great plan since you need to study!), find things to do that don’t require spending money (Netflix and chill slumber party), and try shopping in a friend’s closet.
  5. While on the subject of social activities, be careful not to get involved with too many campus activities. There are so many new activities and groups to explore on campus, but they usually involve paying a fee for membership dues or group activities. Over the course of a year, these activity fees and expenses can add up to several hundred extra dollars that were not in your budget. All of these activities can really take away from your study time too. Limit yourself to one or two groups for at least the first year of college.
  6. Think about whether you really need to bring your car with you. Parking spots on campus can be very expensive, and many universities make you park your car a mile away from campus anyway. So, having a car can be both expensive and inconvenient. If your campus is part of a town or urban area, a car might not be necessary. Explore and consider the other transportation options before you decide to pack up your car. I went to college in Newark, Delaware and did not have my car with me until my final semester. The campus and town were very walkable, and trains and buses were available when we needed to get out of town. Plus, Uber is available in more locations all the time and makes it much easier to get around without your own car as needed.

College Prep: Preparing Your Children for Their Financial Future

preparing students for college finances

 

 

Dear Dad and Moms,

 

College students really do not know what they are doing when it comes to their money. They worry about student loans and debt but don’t have a clue about what they might earn when they graduate, credit reports, or how to manage their money during the semester (let alone after college graduation). Some of them are going to take a college finance class and learn something, but others will not. It’s so easy to dig yourself into a financial pit these days, and it is very hard to get out of that place when the job market is brutally tight.

 

I’m not sure why parents as a whole are failing at this point, but I do have some ideas. Maybe parents just have not thought about the need to pass on personal finance skills. I think this is entirely possible because I can tell you that if anyone sat down and talked to me about managing my money or anything related to personal finance that I don’t remember. In college, I had money I earned during the summer and saved, but I never thought about a budget. I never sat down and calculated my income and expected expenses after graduation. Life skills that were important: making mac and cheese, doing laundry, putting transmission fluid in my car so it would run. Life skills that were not important: budgeting. So, maybe you aren’t thinking about it because you had a similar experience where you figured out the whole money thing as you went. College students are no different today. Studies show that they don’t know just how much they don’t know.

 

Unless you are living under a rock, you probably know that today personal finance is more important than ever. High school and college graduates are heading out into a tough economy where they will be burdened with high health care costs, taxes, and debt. While employees could once depend upon the government and an employee pension to cover retirement expenses, individuals are now expected to adequately save and invest themselves. Many states have begun to require high school courses in personal finance, but parents should not rely on these classes to fully prepare their children for the financial freedoms of college.

 

Maybe we are just uncomfortable talking about money since it can be such a stressful topic in our own lives. Perhaps some parents don’t feel like they understand personal finance enough themselves to be able to give advice to their children. Students going off to college, however, really need basic skills that they are going to use every day. They don’t need to know how to pick investments and the different type of retirement accounts. Start out by making sure they can do simple things like write a check and make a budget for the semester. Empowering your children to take responsibility for their own financial future sets the stage for good choices beyond graduation as well.

 

 

 

My Four Favorite Budgeting Apps (and they are free!)

four favorite budgeting apps

 

As a finance professor, people ask me a lot of questions. One of the most common questions is about ways to make budgeting easier or if “there is an app for that.” There are two difficult parts to the budgeting process. The first part is sitting down to actually make a budget. The second part is knowing where you are in your budget and sticking to it. For me, this is by far the more challenging task because it takes time to record your expenses. I’m always looking for an app to help make my life more efficient, so I have actually tried a lot of budgeting apps over the years. Today I’ve decided to share four of my current favorites.

 

mint money budget app
Mint: Money Manager, Budget, and Personal Finance is a free app that provides a complete money management toolbox for users. You can connect all of your bank, credit card, and investment apps to your personal Mint account and let the app do the rest. Mint will keep track of your spending and income and even make suggestions for how you can improve your budget. If you want an app that will literally track and do everything for you, Mint is the way to go. Personally, I don’t want to use this app for security reasons. I don’t like the idea of tying all of my financial accounts into this one place. If you don’t mind, however, you won’t find anything better than this.

 

daily budget original money budget app
Daily Budget Original is a free app that provides you will a daily budget after you enter your monthly income and fixed expenses. Since it does not connect to your bank account, there is some work on your part. Each time you make a purchase, you’ll need to enter that into the app so that it can deduct that dollar amount from your daily allowance. However, the app is simple and easy to use.

 

mvelopes money budgeting app
Mvelopes is a nice, free app if you are fond of the envelope method of budgeting. You can set up the categories, or envelopes, of your monthly expenses as needed. These are fully customizable, so you can have just a few, broad categories or envelopes for individual expenses like cable, coffee, cell phone, gym membership, etc. Mvelopes will also connect to all of your financial accounts (like Mint) and automatically deduct your expenses. Again, this has the benefit of taking the work out of the equation for you, but be careful about keeping your accounts and identity secured.

 

wellspent money budgeting app
WellSpent is another free app also based on the envelope method of budgeting. Unlike Mvelopes, however, WellSpent does not connect to any of your financial accounts. So, you’ll have to be diligent about entering all of your daily expenses. Once you get into a habit of entering expenses as you go or at a certain time of the day (take a minute to do it while eating lunch or at the end of each day), you’ll find this is an incredibly useful budgeting app. You have the flexibility to add as many envelope categories as you want and track your spending in each category in real-time.

  
Do you use an app for budgeting? If so, do you use one of these or something else? If you do not use a budgeting app, which of these sounds the best to you?