Budgeting Tips For University Students

University is an important time to claim your individuality, expand your social circle and contemplate your career goals. It is also the ideal time to develop healthy financial practices, especially when it comes to budgeting.

Why Does a Budget Matter?

New University students are more likely to fall victim to overspending. With the new found freedom from parents, at least for a semester, students are suddenly given free reign to manage their time and money as they please. Budgeting is challenging for even the typical adult and university has never been more expensive. In recent years, Kenyan graduates left school owing quite a bit of money to private lenders and banks.

If you are a new university student, adopting an essentials-only budgeting plan is key. Before you empty your checking account, access savings or obtain a credit card, you need to ask yourself: what expenses are absolutely essential in University, and what can I remove from my spending plan?

This guide will help you understand how important it is to monitor your spending and give you some guidance on how to track your income and expenses. With these rules adopted, we show you how to build a solid budget, using tools and tips to show the areas where you can effectively save money.

Tracking Income and Expenses

While in university, many students still rely on financial assistance from their families. Parents might pay cell phone or credit card bills for their students, while others deposit cash into their sons and daughters’ accounts on a regularly. However, not every family can afford to do this; most university students have to rely on what they make at a part-time job.

Creating a Budget Building, balancing and maintaining a budget seems like an arduous task, but knowing how much money you earn and spend in a month will help you stay on top of your bills and savings. It will also let you determine what expenses are necessities versus wants, and you’ll be able to alter your budget to save for the things you want to buy but don’t need to survive. Before we dive into creating a budget, there are a few key terms to keep in mind.

• Total Income: This includes the money you arrived at school with, any refunds you receive from your recurring side gig and the funds from a steady paycheck.

• Monthly Income: Recurring funds that you receive each month from your job. Amounts will vary based on the hours you work.

• Discretionary Income: This is your spending money. It’s the funds you have left over after paying your bills and moving money into a savings account.

• Necessities: Goods or services you need to live or succeed in school.

• Wants: In terms of budgeting, these are goods and services that you can live without.

• Fixed Expenses: These are the necessities you are required to pay the same amount for every month.

• Variable Expenses: These are necessities or wants with prices that vary month to month.

• Money to Savings: This is the amount of money you decide to transfer from your checking account to your savings account.

HOW TO BUDGET The initial step to creating a budget is figure out what expenses you have. Using your bank statements, make a list of everything you spend money on in one month, and categorize each transaction as “fixed or variable” and “necessity or want”. Some expenses may fall under more than one category.

BUDGETING TOOLS

Managing your expenses via apps, computer programs and bank services can simplify the process and allow less room for discrepancies. Below, we detail some of the programs designed to make budgeting simple.

Microsoft Excel provides several budgeting templates in it’s latest edition, including one specifically for college students. All are free to use and can be saved on your computer; no internet access is necessary.

Bank Sherpa is an app for users who just want to log income and expenses and track how much of their budget is left. Users choose an amount, category, dates etc.

Remember to cut back on unnecessary spending and use expense tracking apps that can help you stick to your monthly budget. Don’t make the mistake of winging your finances; staying organized and creating a balanced budget will give your financial future some serious promise.