It's no secret that staying on top of finances in college can be tough. Advice is around every corner, but there's more to money management than grabbing extra slices of free pizza at every club callout.
Here are some tips to help you develop an effective student budget:
Track your income and expenses.
To create a useful budget, it’s important to know what you’re working with. By clearly outlining the income you have available, estimating your monthly costs (like rent, groceries, and fun spending money), and tracking your purchases, you can improve your budget over time. This can help you find areas to reduce spending so you can save money, pay off loans, or have a little extra cash on hand. Need help? This Student Budget Calculator is an online tool to make budgeting simple.
Build your emergency fund.
Think about the things in your life that could be the source of unexpected expenses. It’s good to have money set aside for potential car repairs, necessary travel, or rent payments in the event of loss of income. Wondering how to build an emergency fund? Check out this article on building an Emergency Fund.
Use the 50/30/20 Rule.
The 50/30/20 Rule is a simple way to establish your budget. It states that your after-tax income should be divided as follows: 50% to needs, 30% to wants, and 20% to long-term savings.
Set aside cash for fun.
When it comes to having fun with friends, attending events, and grabbing food, it’s easy to overspend. Grabbing a pre-determined amount of cash every week or month can help you budget better. Whatever you withdraw is all you have for fun outings and activities.
Get a credit card that gives cash back.
When used responsibly, a credit card can help you build credit which is important for things like apartment hunting and large expenses that require loans. Purdue Federal Visa® Credit Cards offer fixed rates, no annual fees1 and instant cash back on your purchases. Not to mention, they help you stay out of unnecessary debt with a conservative starting limit.
Set a goal.
Whether you have multiple small goals or one long-term savings goal, it’s good to have an idea of why you’re saving. Breaking down what you value and need—and setting related savings goals—will help you stick to your budget.
Get financial counseling.
While you may not think you need financial counseling, it never hurts to have a professional look at your budget. As the official financial wellness provider of Purdue University, we teamed up with Purdue RecWell to create Boiler Financial Track, which offers free financial advising for students. Ivy Tech students can utilize The Financial Vine for free financial counseling.
Starting school is an exciting new step, but taking a moment to plan and budget with these quick tips can help you get on the right financial track for the next four years and beyond.
Learn more about financial perks and opportunities for student members of Purdue Federal Credit Union here.
