Plan and Execute a Budget While in School

Money can seem like an abstraction, especially when students use plastic to pay for their purchases, rather than crisp dollars and shiny coins. In no time at all, students may find that they’ve used up all of their money on personal expenses and unnecessary things, and then they’ll have bills crowding their inboxes. Taking charge of your personal finances can seem difficult or even impossible, but creating and sticking to a budget can be a step in the right direction.


What Is a Budget?

The goal of a budget is really quite simple:

To compare the amount of money coming in with the amount going out, allowing consumers to make smarter choices about their finances.

Typically, budgets are considered living documents that change as a person’s income level and debt level changes. The amounts that appear on these documents aren’t fixed in stone. However, those who do craft a good budget and make it work can reap huge rewards. Unfortunately, only 32 percent of people do so.

Percent of Americans that use a budget

Source: Gallup poll, as reported by the Deseret News

Save up to 90% on your textbooks

Thankfully, it’s never to late for students to learn. By following a few simple steps, and sticking to them on a regular basis, students can make a budget that works. Here’s how to get started.


Step-by-Step

Living On a Budget

Many people come up with wonderful budget ideas and then find that they can’t stick to the resolutions they’ve made.

Changing spending habits is hard, even if it will result in long-term benefits.

While people who keep budgets may have hundreds of tips and tricks they use to stay on track, these four steps may be very useful to people who are just getting started.

There are also some online tools and services that can help you manage and stick to a budget, such as Mint and BudgetPulse. Apps and services like Mint track your spending habits on a daily basis, and can help you analyze your spending based on categories (ex. Groceries, entertainment, transportation, restaurants, etc.).


Word of Caution

It isn’t easy to create a budget, and it’s certainly not easy to live within the boundaries a budget sets. At times, students might feel as though their lives would be better if they stopped worrying about money altogether and simply kept spending now with the hopes of paying it all back later. Unfortunately, that kind of thinking can result in disaster. The 2011 federal student loan 3-year default rate was 13.4 percent according to the U.S. Department of Education.

Students who don’t learn how to budget now may borrow too much for school, and when they start their careers, they may not know how to manage their finances in order to repay their loans. Those students who do take control now will be in much better financial shape, both while they’re in school and when their school days are over.