Money Management Tips
Going to school can be an exciting experience, but it comes with a budgetary squeeze. Your expenses are piling up—tuition, books, transportation, supplies, maybe even childcare—but as you concentrate more and more on your studies, your income may be decreasing.
It’s easy to turn to loans and credit cards to cover the gap. But that can lead to an even tighter budget squeeze when it’s time to pay that money back—plus interest.
To start your life after school without an overwhelming amount of debt, take the time to examine your expenses now and create a budget that works for you. That way, you’ll be able to pay your bills on time and maintain good credit for life.
Start with the American Student Assistance® (ASA) Toolbox, which has calculators and tools that help you estimate your loan payments, compare the cost of living in different regions, and learn more about careers that match your skills and how much they pay.
Creating a Budget
Can you afford that dinner out, or that new cell phone? Unless you have a monthly budget, you won’t know the answer, and you could end up with out-of-control debt. Try using our convenient budget worksheet to keep track.
- – First, list the income you have coming in every month
- – Then, list your expenses by category. Be sure to set some money aside for savings, and count that as a regular expense
- – Include a bit for “surprise” expenses each month, like birthday presents, parking tickets, and so forth
- – Lastly, compare your total expenses to your total income and see how you’re doing. If you spend more than you make, it’s time to do some “Living Within Your Means”
Try keeping your budget someplace where you’ll see it often—in your wallet or over your desk. Making a budget and then ignoring it doesn’t work.
Living Within Your Means
When you’re living on student loans or credit cards, it’s easy to feel like money is “free.” It’s not—and getting stuck repaying those debts (plus the accumulating interest) can make life after school very stressful. In particular, credit cards have become a dangerous trap for many students, who wind up graduating with thousands of dollars of extra debt they could have avoided.
The best way to ensure your life after school will be free of debt-related stress is to live like a student now. There are plenty of ways to save:
- – Housing: Pick an apartment or dorm in a less convenient or less fashionable location. Get a roommate or 2. If you need furniture, buy it used or borrow it from relatives
- – Transportation: Ride a bike, walk, take the bus, or join a car-share program instead of owning a car
- – Entertainment: Skip cable TV. Find free nights at local museums. Check movies out of the library instead of renting or buying them. Use the campus gym or exercise outside instead of joining a private health club
- – Food: Make coffee instead of buying it, carry your own refillable water bottle, and eat at the dining hall instead of ordering pizza
Once you’re out of school and earning money, living within your means becomes a little easier, but it still requires discipline and planning. Start now and build good money management habits, and you’ll be better set for financial success in the future.
