Don’t overthink it
Making a budget doesn’t have to be complicated. It can be as simple as figuring out how much you have to spend each month—which will include money you receive from your parents, from student jobs, or other sources—and how much you expect to spend. Expenses will include things such as rent (if you’re not in a dorm), any meals you’ll have to pay for that aren’t covered in a meal plan, the costs of books, fees, or activities related to your courses, and any travel or commuting costs. Once you’ve identified your monthly needs, whatever is left is yours to spend on your wants, like outings with friends. It’s a good idea to track your spending as you go to be sure you’re on target with your budget and to get a sense of where you’re spending your money.
Keep a lid on credit
56 percent of undergraduates have credit cards, according to a national Sallie Mae study. Managed properly through controlled spending, credit cards can be an important part of building a solid credit history. However, be sure to monitor your balance. You may be surprised by how quickly your purchases add up. To avoid overspending, stick to your budget and pay off your balance each month. Before you sign up, be sure to read the fine print. Look for a card with low or no annual fees, and compare offers to find the lowest interest rate. Also, find out how long the grace period—the amount of time you have to pay your balance in full without paying a finance charge—on the credit card is and what you’ll be charged for a late payment. Once you begin to use credit, the three major credit reporting companies will begin calculating your credit score based on several factors, including your card payment history. You’re eligible to receive a free credit report from each of the three major credit reporting companies once every 12 months. Go to www.annualcreditreport.com for more information, or take advantage of free services such as Credit Karma.
Don’t spend more than necessary
Although you may be signed up for meals at the college cafeteria, you may sometimes want to order takeout. It’s important to be mindful of how much you are spending when ordering out and how often you’re doing so. In addition, obtaining new textbooks doesn’t always equate to spending big bucks. Many businesses give discounts to students or sell gently used books or other supplies. Research all your opportunities to save a few bucks on purchases and make the most of them.
Set some aside for later
Remember that it’s never too early to get into the habit of putting some of your money into a savings account. Doing so can help you afford things like a trip to a tropical island or a ski resort during your break, or your account can serve as a nest egg for life beyond college. Saving is a good habit to nurture for your future.
Your CPA can help
As you begin your independent financial future, be sure to turn to a qualified CPA in your area for valuable advice and information. He or she can help answer all of your financial questions. To learn more budgeting and financial priority tips, visit www.picpa.org/moneyandlife.
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