For the most part, whenever we think about college life we think freedom and fun. Yet, there is nothing fun about daily stressing over your finances and there is no freedom in being chained to an ever-increasing pile of debt. Money management will help you avoid these stressful situations. You need to begin sometime during your life and the sooner the better.
What college students ought to know about money management:
In order to manage your money properly you must create a budget. The purpose of a budget is to outline a practical plan for spending the limited money that most college students have. Since your income and expenses are constantly fluctuating, whatever budget you decide to use needs to be flexible.
First, write down where all your income comes from. This usually consists of income from work, grants, scholarships, allowance from home, etc. The second step you should take is writing down all your expenses. This is much easier if you divide them into two catagories: fixed and flexible.
Fixed expenses are exact amounts that are due on specific dates. Flexible expenses are ever changing amounts of money that you spend on your wants and needs.
Example Fixed Expenses:
– Car payment
– Health insurance
– College Tuition
Example Flexible Expenses:
– Going over on your cell phone minutes or long distance telephone calls
– Social expenses (movies, concerts, football games, etc)
– Personal expenses (clothes, groceries, health costs, domestic supplies, haircuts, etc.)
Calculate all the income and expenses you have (you may have to guess on many of the expenses). Now look it over. Do your expenses exceed your income? If so, figure out how you can increase your income or decrease your expenses (or a little of both). This is simple but necessary if you want to stay out of the hole while you are attending school.
It is going to take some sacrifice to reduce your expenses. Many college students are used to spending their money impulsively. This kind of money management will lead to financial slavery. If you are ready to lower your expenses try some of these tips:
– Pay your bills on time
– Stand against peer pressure
– Buy used books
– Shop at discount stores
– Use coupons
– Don’t eat out and stop buying junk food
– Share an apartment
Everybody is going to need a different type of budget to fit his or her individual needs. However, you can find basic budgets online, in financial books or you can simply ask your parents or friends to give you some ideas. Do not allow debt to chain you down. Find a budget, use it, and be okay with sacrificing a little to stay out of debt.
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