Money Management for College Students - Learn to Recognize Want vs. Need
One of the most common ways college students sabotage their budgets is spending significant amounts of money on things they can do without. An important key of basic money management involves separating wants from necessities and limiting the majority of your spending to things you really need.
The best way to understand your wants versus your needs is to track your spending. Without altering your behavior, write down everything you spend money on for a full week. Most people who engage in this activity are shocked to find out how much money they spend on nonessential items.
For example, if you purchase a gourmet coffee and muffin every morning, over the course of a week, you could be spending $50-$75 on items that many people would consider non-essential purchases. Spending money on things that you want can sabotage your budget, leaving you without sufficient funds to cover essentials.
Where and how you choose to spend your money is your personal decision. The keys to developing strong money management skills are to understand your spending, live within your means and to be sure that you have sufficient resources in the event of an emergency. Once you understand your spending patterns, you can make informed money management decisions.
Frugal Living as a Money Management Technique
The spending and saving habits that you develop in college are likely to stay with you throughout your adult life. This is one of the reasons that money management for college students is so important. Learning to live frugally is one of the most beneficial money management techniques to master.
Frugal Living for College Students:
- Instead of purchasing expensive individually packaged food items, split larger packages with your roommates.
- Learn to cook instead of eating out every meal.
- Make coffee at home to take to class instead of spending $5 on a cup of gourmet coffee.
- Master the art of thrift store shopping.
- Plan inexpensive recreational activities such as hiking or picnicking.
- Ride your bicycle or walk across campus instead of driving.
- Take advantage of student discounts
- Wait for movies to come out on DVD instead of going to the theatre.