Basic Money Management

One of the most basic money management techniques is learning how to budget properly, which is often a new experience for many college students. Whether you’re working with a student loan disbursement, work-study payments, or income from a part-time job on or off campus, you’ll need to learn how to stretch that money and work with what you have. Budgeting will always involve some sacrifice – impulse buying is a big no-no – so be ready to make some tough decisions on what you can and can’t afford.

Lucky for you, you can stress a little less on where to get started with your personal budget. We’ve come up with tips on creating a budget, step by step, so that you have an easy reference to help you come up with a plan for managing your income and expenses. These tips are good even after you’ve graduated too, because basic money management is always useful, whether you’re counting pennies on campus or at that first job post-graduation.

1. Make a list of your fixed monthly expenses, which may include your rent, car payment, and cell phone bill, depending on what you’re responsible for each month. (Your parents may be helping you out with some of these.)
2. Determine all of your sources of income. If you have any outside sources of income, consider this in your budget. Don’t count on things like the annual pot of birthday money, as you never know when your relatives will stop sending those checks.
3. Note when both your bills arrive and you receive your income so that you can make sure funds will be available to pay your bills in a timely manner. You never want to find yourself in a position where paying a late fee is your only option.
4. Make a list of your mandatory variable expenses, such as groceries and gas. You can allocate dollar values to these items, based on the amount of income you have left after your fixed expenses are accounted for and what you really need to spend for these expenses.
5. Total your monthly fixed and variable expenses with your total monthly income. More income than expenses is obviously what you’d like to see. If you don't have enough money to cover your fixed and variable expenses, you may need to investigate obtaining an additional source of income. If there are places in your budget to cut costs – this is where tough decisions come into play – you may be forced to do so.
6. If you have money left over, those funds represent your disposable income and can be saved or used for non-essential and/or emergency expenses.
7. Review your budget on a regular basis, especially when the costs of any of your expenses increase.