College students are often tight for cash, squeezed from all sides by tuition fees, textbooks, accomodation, not to mention food and other necessities. That is why it is very important that you are able to budget effectively, if you want to finish college with your finances in good shape. Here are the top ten budgeting tips for college students:

  1. Be realistic

 It may sound obvious that you should be realistic about your monthly income and outgoings, but there is actually a bit more to it than that. You need to make a forecast about how much money you will have coming in, and how much you will need to spend in order to live comfortably. This is more difficult than it seems.

  1. Separate the essential from the non-essential

 There are certain budget items that you ‘need’ and there are other items that you merely ‘want’ but don’t really need. The non-essential items must be relegated to the back of the queue when the allotment of monthly funds is concerned, and that is the only way to make your budget work from month to month.

  1. Guess High for expenses and low for income

 In order to make sure your budget works from month to month, you need to be quite conservative in your estimates. That means accounting for lower income and higher expenses. That way, even if your income is higher and expenses lower, you have money left over. This is a far better scenario than the opposite, overestimating your income and underestimating your expenses, which leads you into debt.

  1. Include a general category in your budget

 It is a very good idea to plan for various unexpected expenses in your budget in advance. The best way to do this is to tally up all of your expenses for the month, and allocate an additional 10% of that sum for various expenses. That way, you are prepared for any emergency that might come your way. If you end up not using this money, simply reserve it, and add to it next month. That way, you will have some extra savings for a rainy day.

  1. Count savings among your expenses each month

 Decide on how much you want to save each month (in addition to the item from the previous paragraph), and then count that sum as an expense in your budget. That way, you are forcing yourself to put money aside each month, which will help you a lot in the long run.

It would also be a good idea to open up a separate savings account and deposit money into it each month. This is a particularly good option if the bank offers you a good deal as far as the interest rate they will pay you is concerned.

  1. Keep your budget in line with your goals and values

 Once you’ve made your budget, and stuck to it for several months, you would do well to check it to see whether your needs and values have changed in the meantime. In that case, it may be necessary to recalculate your expenses, and reallocate funds according to your new priorities. This may seem scary, but it is necessary if you are to stick to a budget from month to month.

  1. Organize your bills

 Don’t wait for your bills and receipts to accumulate to start organizing them. File them away into categories such as housing, utilities, car expenses etc as soon as you pay them. That will make it easier if you need to find them in order to dispute a bill, or apply for a new service.

  1. Rebalance your budget

 Governments do it all the time, so why shouldn’t you? Make sure you stay on top of your expenditures and income, and don’t just blindly stick to your budget once you’ve made it. Make sure you can be flexible with recalculating and rebalancing it as necessary. 

  1. Pay in cash for small expenses

 Contrary to some other budgeting advice, you should pay in cash as often as you can. It is more difficult to calculate your expenses that way, but it is good training, and before long, you will be able to get a feel about how much you are spending without thinking about it too much.

  1. Don’t beat yourself up too much

No one is perfect, and you should expect to make small transgressions each month. Don’t beat yourself up about it too hard, especially if it hasn’t had any serious impact on your overall finances for that month. Treat yourself.