Whether you are entering your first year at your university or your last year, everyone goes through the same things – amazing experiences, new friends, new opportunities, and new expenses. For freshmen, your expenses may vary, but of course you have to buy your books and a handful of new things for your dorm, like a TV, cool Bluetooth speaker for when you have dorm parties (good times), or probably replace that 2014 laptop you got when you started high school with something faster and more reliable. For seniors, you’re most likely moving off campus (if you haven’t already) and will have to face more “grown up” expenses such as gas/electric, internet, and rent. You and your friends will also be of age to go to bars and clubs, which shouldn’t technically make the list here, but c’mon, you need to think about those things.
The biggest hardship that most college students face, especially underclassmen, is that for the most part, your spending abilities are limited to money that you worked hard for and saved up through the summer months, or student loans. As you get further into your education and your class schedule starts to thin out, you will probably also pick up a part-time job, but that will be offset by the likely higher cost of living off-campus and, honestly, the higher cost of having friends.
I did not know as much about money management when I started college as I do now. I had way more money on the first day of college than I did at any other time before I graduated, so my goal here is to make sure you don’t fall into the same trap that I did, because it’s very easy to lose yourself.
Everyone’s sources of funding may be different, whether it is an allowance that your parents give you, financial aid, a job, or just impeccable saving. Going into college, you will likely be aware of where your money is coming from. If it is student loans/financial aid in an amount that will cover your entire year, stop reading here and go check out our article dedicated to student loans. If you are getting money elsewhere, keep reading.
We will be covering four key pieces to successful college finances:
- Understand Your Situation
- Set Realistic Savings Goals
- Create a Budget
- Form Agreements with Your Roommates
Understand Your Situation
The first thing that needs to be done is understanding the life that is ahead of you. Are you on a meal plan? Are you allowed to have a car on campus? If so, will you be driving a lot? Are you planning to join a fraternity or sorority? Being able to look objectively at the experience you are going to have is key in determining how much money you will need and, of course, how you will manage it.
Set Realistic Savings Goals
The second thing, once you kind of figure out all of that, is to at least try to make sure you have some reserve money in savings and set a stringent goal to not touch it. This was my #1 pitfall when I started college. I had over $2k saved up from my previous summer and I blew through it in the first few months of school. I still remember going home for winter break with no income, $5 in my checking account, and my gas light on as I pulled into the driveway at my family’s house. Holiday money saved me, but it doesn’t have to save you. A properly maintained financial life in school will ultimately take all of the pressure off and let you focus on your education.
Create a Budget
The third thing is setting up an appropriate budget for your non-savings money. If your only income is $50 a week that your parents give you, work with it. A great way to manage your money in college is to pull cash from the campus ATM at the start of every week or other time period and train yourself to let that money carry you. This is a pure form of self control: if it’s Saturday night and your friends want to go out and you only have $10 left, try to suggest something else. Everyone is going through the same things and they should understand and respect the fact that you are trying to be responsible and not put yourself in an unfavorable position. Not everyone needs a budget and sitting down and attributing a certain amount of money to specific categories is not only cumbersome but can also feel limiting and stressful. The best way about it is to use your own discretion when spending and just making sure you stay within your overall spending threshold.
Form Agreements with Your Roommates
The fourth step, which really applies to upperclassmen or anyone living in an apartment, is to make sure to form legitimate, tangible agreements with your roommates to properly split your rent, utilities, and other living expenses. This will help you and your roommates stabilize your financial lives through school, creating a sense of consistency and predictability. By doing this, you are setting yourself up for success and freeing up money for food, gas, and social events, with emphasis on social events. One of the biggest regrets of college graduates is that they did not spend more time with friends or go out enough. Keep this in mind but do it responsibly.
Final Words
College is the best time of a lot of people’s lives. While education should be the top priority, socializing and preparing for adulthood are equally important throughout your four years. In order to remain focused on your studies, pay your bills, and enjoy your time to the fullest, you will need to manage your money properly. By understanding your situation, setting realistic savings goals, creating a budget, and forming solid agreements with your roommates, you will be able to get through college with no issues.
