Creating a spending plan is an important first step toward mastering your financial situation. And the best part is that it’s pretty simple, if you follow these basic steps.
- List your monthly income sources and savings, as well as allowances from your parents or guardians.
- Next, determine and track your expenses. This includes books, school supplies, food, rent and utilities, transportation, and fun/recreational expenses.
- Balance your income and expenses. Be sure to set aside funds for savings, too.
- Start an emergency fund that’s separate from your daily debit account. By setting up monthly automatic fund transfers into your emergency account, you’ll have a safety net that can help if the unexpected happens.
Seek to create a college spending plan that strikes a healthy balance between your wants and your needs. This is particularly true when it comes to renting.
For many, picking the right house or apartment in a tight rental market is daunting, but by preparing in advance, you’re more likely to find the perfect place to call home.
Before you start looking at places to rent, it helps to get a sense of how much you’ll need to pay. You’ll probably find a wide range of prices in most areas, which may leave you feeling unsure of what price to target in your search. Keep in mind that while rent will probably be your biggest single expense, you don’t want to get locked into paying more than you can afford. In an ideal world, you wouldn’t want to spend more than 25% of your take-home pay on housing, but in a lot of high-demand urban areas and as a college student you may find yourself having to spend much more of your budget on housing. That’s why it is critical to create a college spending plan so you know how much you can spend before you sign a lease.
The cost of renting is typically more than the monthly rental price. Be sure to understand the costs associated with the rentals you are considering. These additional expenses could include: an application fee, security deposit, first month’s rent at signing, utilities, parking and furnishings.
Use our coaching tools and calculators to create your own spending plan and read more about managing expenses as a college student in our college student guide.
Article Written By: Jerry Johnson | UW Credit Union