Getting through college requires smart goal setting and money management. You may not be a finance major, but all college students need to learn to be in charge of their own budget. Money management was not my primary focus in high school, but as graduation approached and I became more excited at the prospect of being on my own, my parents brought me back to reality.
They informed me that I would pay for many of my own expenses. They would take care of the big stuff (tuition, room and board, airline tickets home from school) but I would have to pay for everything else. Books, clothes, music, movies, pizza for study breaks and even the groceries I’d need at school, would all have to come out of my pocket. Budgeting my own money would soon become very real.
The challenge for me was learning how to handle money so I’d have everything I need and still be able to see a movie once in a while. The trick was identifying the traps that keep you from saving that money.
I’ve come up with lists of the biggest money wasters at school and the ways I keep my savings account from dwindling. I’ve also broken down my spending in a typical month so you can see how I manage to get by on a limited budget.
Goals To Set When Maintaining a Limited Budget
Big Money Wasters
Alcohol – A lot of students leave for college excited at the prospect of no parents and never-ending parties. Alcohol is really expensive, however, and if you’re not careful, you’ll blow through your money in a matter of months. Even just hitting the bars and going to parties on Wednesday, Friday, and Saturday night can cost more than $30 a week. In a 9-month school year that could add up to more than $1000!
Food – OK, college dining halls aren’t exactly known for dishing out fine cuisine. And on Saturday night, a slice of pizza might sound really good. That’s fine every so often. Limit these late night food runs to once a week; while $2 for a slice of pizza seems cheap, it can take away from money needed for the essentials.
Online shopping – This can hurt, especially for girls. It’s OK to surf the web for shoes while on a study break. Buying one or two pairs of $95 shoes that you “can’t live without,” however, adds up fast. If you have to shop, be careful not to go overboard. Be realistic about what you’ll wear and only buy that.
Coffee – It makes many a late night study session possible, but it can kill your savings. Many students don’t see it as a huge expense, and in moderation, it can work. A $4 cappuccino once in a while is fine as a treat or to boost yourself during exam week; buying one four days a week, however, will cost a latte (groan). Spending $12-$15 a week on coffee means around $60 a month, or almost $240 a semester.
Credit Cards – These are so dangerous. It’s easy for a college student to get one, and even easier to use. Unless you pay the entire balance each month, however, you’ll have to deal with hefty interest rates. Stick to a debit card; it’s easier to track how much you’re spending, and since the money comes out of your account right away, it’ll remind you to hold off on expensive purchases.
Keeping Your Savings Account Affloat
Spend only when necessary – Many high school graduates receive gifts of money from friends and family. Instead of spending it throughout the summer on movies or lunch dates, set it aside for the end of the summer. When it comes time to buy books, clothes, and school supplies, you’ll be glad you saved.
Get a job – If your parents aren’t regularly sending you money, then a job is the way to go. College campuses have tons of job opportunities specifically for students. I worked in a coffee shop the summer before I left for school, so the day I arrived there, I contacted the school-owned café in town and got a job there. Check the school’s employment section on the website; it will often list jobs for students, and may let you apply online.
Keep track of where your money goes – It’s easy to forget how much you’ve spent, and I’ve had the icky experience of being surprised by my bank statement. Use online banking, so you can manage your money without having to go to a bank and can check transcripts of all your purchases. Watch out for overdraft fees, too—they’re an unnecessary and preventable waste of money.
Use cash –On Friday afternoon, go to an ATM and withdraw about $30, depending upon any plans you may have for the weekend. Spend wisely, and when you’re out of cash, spend the rest of the weekend studying. When you actually have to hand money to a cashier, you’re more likely to make worthwhile purchases.
Set a spending limit – For my first semester, I decided not to let my savings account dip below $1000. I started the semester with $1,900 and ended it with about $1100.
Money Spent in a Typical Month
Everybody has different needs and expenses, but this is how I spend in a typical month.
- Groceries: $90 (for snacks like microwave popcorn, crackers, yogurt, apples, string cheese, a couple of frozen dinners, bottled water and a few household items.)
- School supplies: $15 (folders rip, pens disappear, you run out of staples...)
- Gifts: $30 (friends and family love t-shirts and mugs from your school)
- Fun stuff: $40 (for a movie, dinner out or gas money for an out-of-town road-trip)
- Transportation: $50 (for cab fare to the airport if you go to school far from home. like me. Other expenses might include bike maintenance, carpooling, parking fees, train tickets etc.)
Grand Total: $175 a month
*This doesn’t include emergency money, and students with cars will have to factor in the cost of gas and maintenance. Also, special occasions, like Christmas shopping, will require some thinking ahead. I figure clothes and books are really once-per-semester things, so I don’t count them as typical spending.
No matter how you cut it, college is expensive. But it’s a great time to learn how to live frugally and responsibly. For a successful college experience, every college student needs to know the basics of money management.
Kathleen Hicks is a freshman, studying English and French (not finance) at Colgate University in Hamilton, NY.