4 Steps for Making a Balanced Student Budget

For students pursuing higher education or career training, a fruitful career can be just around the corner. But during the time spent in school, money is often tight. Students must learn to balance their income and expenses to avoid putting an undue financial burden on themselves while in school.

Below, you will learn the basic steps required to make a student budget, as well as some additional tips to help make your financial journey easier while in school. Enjoy!

1. Calculate Your Income

The first step to calculating a student budget is to determine how much money you have coming in each month. Many students work, even while attending school full-time. Others find a paid internship in a field related to their studies or take part in a federal work-study job at their school.

Student income can be less straightforward if you take out loans for school or receive grants or scholarships. In general, when calculating your income, include all the money that comes in each month that you can use on expenses like tuition, rent, and food. Income sources for students might include:

• Student loans
• Scholarships and grants
• Income from work-study, internships, and jobs outside of school
• Financial contributions from parents and other family members

Since the easiest way to calculate a budget is on a monthly basis, you might have to do some math if you are receiving student loans or grant money to pay for tuition and other expenses. These income sources often come in once or twice per school year, which means you will need to divide by 6 or 12, depending on the payment schedule.

If you choose to pursue schooling through Blackstone Career Institute, you can skip some math, as you will not be utilizing any loans. Students can graduate debt-free with our affordable monthly payment plans.

2. Organize and Track Your Expenses

The part of budgeting that requires the most work is tracking and organizing your monthly expenses. First, make a list of all your regular expenses, including things like groceries, rent, eating out, gym membership, gas, clothing, school supplies, etc. Next, divide your expenses into two categories:

• Fixed expenses: Generally, expenses that fall into the “needs” category include things like groceries, rent, transportation, insurance, and debt payments. For students, tuition is one of the most common expenses.
• Variable expenses: Variable expenses are more flexible, and generally these are more “wants” than “needs”. Examples include travel, dining out, entertainment, and shopping.

3. Determine Average Monthly Expenses

Many of your expenses will vary from month to month. You might spend $150 on groceries one month, and $300 the next. Take a look at your expenses across a few months to determine a reliable average for each expense category.

Once you have averages for your fixed and variable monthly expenses, you are ready to calculate your student budget. Compare your monthly income with your monthly expenses. If you are spending significantly more money than you have coming in, it’s time to adjust your expenses.

This is where it becomes helpful to have your monthly expenses divided into fixed and variable categories. If you are spending more than you are making, you can head straight to your variable expenses to find ways to cut back on spending to even out your student budget.

4. Revisit and Make Adjustments

Expenses and income are not fixed; they change over time. As your student budget changes, make sure to revisit your calculations and adjust accordingly. Maybe during your initial budgeting process, you had to cut back on dining out in order to break even each month. But a few months later, you get a raise—increasing your monthly income, and allowing you the opportunity to revisit your budget and add a variable expense or two that you have been missing out on.

Tools and Apps for Easy Student Budgeting

The most challenging aspect of effective budgeting is learning to accurately track and average out your monthly expenses. Fortunately, there are several apps at your disposal today that can make this task much easier. Here are some of our favorite apps and tools for easy budget-making:

• In-bank tools: Many major banks offer free tools to help you track your monthly income and expenses. With the advancement of online banking, these tools seamlessly integrate into your existing bank accounts to track incoming and outgoing money. Banks like Wells Fargo and Bank of America offer free budgeting tools to account holders.
• YNAB: This intuitive and easy-to-use app has versions available for both iOS and Android users. YNAB is a particularly hands-on budgeting app, meaning they want you to specify an intention for every dollar you have coming in. YNAB links to your bank account to track your spending. You can use YNAB to track income and expenses, and to make adjustments on how you wish to spend your money. A year-long membership to the app costs $99, but college students can get a year free with YNAB.
• EveryDollar: EveryDollar offers both a free and a paid version of the budgeting app. The paid version of the app links to your bank account, while the free version requires that you manually enter your income and expenses. This app is very sleek and easy to use. EveryDollar can help you save money for future goals through budgeting.

 

Written by Adam Wernham