Most college students struggle to budget money. There are countless opportunities to indulge yourself, but all these experiences also involve spending money. Despite this reality, you can still save money by learning and practicing proven budgeting tips for college students.
Download a Money Management App
Money management apps like Mint are free. College students can use this app to learn to control their spending and save money. Most money management apps allow users to deposit checks, use automation, manage and organize their finances, and access information from anywhere. Using an app also helps you track your spending and goal progress.
It may feel inconvenient to use a money management app at first, but you will get used to the practice eventually. Plus, managing your finances will be easier.
Build a Financial Foundation
Save money for unexpected expenses and emergencies. Most financial advisors recommend saving at least 10% of your monthly budget to build a financial foundation. Don’t worry if you can’t meet this range; saving even a small amount is a lot better than saving none at all.
List Down Expenses
Aside from using a money management app, make a detailed list of your monthly expenses. A detailed list allows you to track your spending and make necessary adjustments according to your financial situation. It is also a way to determine how much spare money you can use for things that are not absolutely necessary.
When making a list, separate needs from wants. Record all fixed monthly expenses such as rent, transportation, and food. It is also important to set aside your budget for these.
Next, list down items that are not as important to buy every month under discretionary expenses. Then, set an amount for discretionary spending, but make sure the budget for this does not exceed your means.
Spend Below Your Means
Moving on, you can use your list to determine how much spare money you have for fun. Stay within this range, or you could even split your fun money and save half of it.
Alternatively, you can use the 50-30-20 rule. Use 50% of your budget for necessities, 30% for savings and investments, and 20% for your wants. Just make sure that 50% of your monthly budget covers your expenses for necessities.
Collaborate With Roommates
Take advantage of the opportunity to collaborate with your roommates. You can contribute a certain amount each month and buy toiletries and household items as a group. This is an effective way to save money since buying in bulk is also cheaper.
Budgeting money is a huge challenge for college students, but it does not mean it can’t be done. There are more money-budgeting tips for college students that you can try, but you can start by taking advantage of using a money management app, tracking your expenses with a list, setting aside monthly savings, and not spending beyond your means. Then, you can also collaborate with roommates to cut costs on toiletries and household items every month.