The country’s economic situation was not ideal in 2023, and college students are not optimistic about 2024.
In 2023, the average American college student faced several financial challenges. The first obstacle is rising inflation. It meant students struggled to afford necessities like groceries and rent.
Indeed, according to Bloomberg, groceries are up 25% since January 2020, and housing affordability is at its worst.
Though most of 2023 has been grim, inflation slowed in the last quarter of the year. In November, Reuters reported a 5% decrease in gasoline prices, offsetting rental prices. Even though there’s hope for a better economy, it’s still vital for students to brace for economic challenges and gain skills to make sound financial decisions.
Students who are worried about how to pay their bills and tuition in 2024 can take advantage of proven tactics to manage financial distress.
College Budgets & Why They Are Essential
The first step to making sound financial decisions in 2024 is to create a college budget. This is a financial plan tailored to a college student’s expenses and income.
Having a college budget is crucial. It will help you manage your finances better, have a good idea of your regular monthly expenses (food, utilities, housing, etc), and prioritize where to spend what little extra you have — on books, supplies, transportation.
Following a budget also has benefits, like avoiding debt by allocating resources wisely. It will rescue you from overspending and prioritizing frivolous items. Additionally, a college budget is vital to ensure all your essential needs are met and you have money saved for emergencies.
How to Create a College Budget
A poorly made college budget will make it difficult to visualize your spending plan, but a good one will help you document your income and expenses accurately so you can adjust your spending accordingly.
Create a spreadsheet
Using a spreadsheet to create your college budget is a good idea. The spreadsheet offers a structured solution for tracking income, expenses, and savings. You can get a visual representation of your finances each month.
A college budget will also help you analyze spending patterns to make informed financial decisions for the next semester.
There are several platforms to make college budget spreadsheets. Google Sheets and Microsoft Excel both allow you to calculate and analyze your finances effectively.
Google Sheets
This web-based application has features similar to traditional software like Excel. It allows you to customize and share your spreadsheet on any device while on the go. Templates are available and tailored explicitly for college budgets, making it convenient for you to start budgeting immediately.
You can also share your Google sheet with college friends to bounce budgeting ideas off each other.
Microsoft Excel
Microsoft Excel is an excellent platform for creating complex budgets and financial models for college. It has robust features like built-in formulas and functions, charts and graphs, pivot tables, and pre-designed budget templates. Ultimately, the platform you choose for your college budget depends on your personal preferences, finances, and other specific needs.
Work out Your Net Income
To pay bills and other expenses in college, students need to have an income. An income can be acquired through part-time, on-campus, online, and gig jobs. Students may also get paid through scholarships and grants from government programs, civic groups, and colleges.
Wherever you receive financial support, it’s vital to calculate your net income to help you establish your budget. You can tailor your budget based on when you are paid. This could be weekly, bi-weekly, monthly, or quarterly.
Establish Your Expenses
Now that you’ve calculated your net income, the next step is to list your monthly expenses. What is your lifestyle? What do you usually spend on in college? Examples include hair/grooming, clothing, rent, groceries, tuition, insurance, utilities, and entertainment.
Once you’ve listed your expenses, determine which ones are variable and fixed. Variable expenses are costs that change from month to month, like groceries, hobbies, gas, clothes, and healthcare. In contrast, fixed expenses remain the same, including rent, subscription services, and debt payments.
Calculate the Monthly Cost of Each Item
To create a compelling college budget sheet, you need to list the average cost of all your expenses. Create separate columns for your variable and fixed expenses for an organized layout. You can then calculate your total expenses.
Evaluate Your Income and Expenses
The last step to creating a college budget is to compare your income and expenses. Are your costs surpassing your income? It could be a sign that you need to get your spending under control. Adjust your expenses to ensure you are living within your means and building savings.
If you need help with how to spend better, you can save money in several ways.
How to Save Money in College
Reduce unnecessary expenses. Evaluate your spending habits frequently and minimize unnecessary items and services. Consider canceling subscriptions you’re not using. For example, why pay for both Netflix and Hulu? Pick the cheapest streaming service.
Less takeout, more home-cooked meals. Understandably, finding the time to cook after classes and assignments can be exhausting. However, ordering takeout too often can add up. Consider making simple home-cooked meals and meal prepping to save you time. It is cheaper and healthier.
Take advantage of student discounts. As a student, you should update some of your scruffy-looking clothes to look presentable on campus. Fortunately, many clothing brands offer generous student discounts. But that doesn’t mean you should overspend.
Buy used textbooks. One of a college student’s most significant expenses is textbooks. Cut your expenses and rent or buy used books. Some websites have free textbooks. Another, cheaper alternative is to take advantage of the resources in the library.
Find a freelance job. Having an extra income stream is a great way to reduce expenses. If your schedule allows, consider getting a freelance job. Examples of freelance work are graphic design, writing, and content creation.
Learn to turn down meetups with friends. A common reason students face financial challenges is because of trying to fit in with peer groups. Don’t feel guilty for saying “no” to eating out or attending concerts. It will save you a lot of money.
Plan ahead to avoid taking unnecessary courses. Taking too many classes without a purpose is counterproductive, as it inflates tuition. Have a discussion with your advisor to determine which classes are worth it. This will help reduce the costs of tuition, textbooks, and rent.
Take summer classes. Reconsider using your summer break for vacations. Instead, take summer classes to graduate early.
