Secrets way to Create a Spending Plan for students

Secrets to a Successful Spending Plan (In Other Words, a Budget)

  1. Adopt a spending plan early in your first semester so you can keep track of how much money you'll need, how much you've got, and whether you're staying on track or falling behind. Use a budget spreadsheet like the one at You'll have the peace of mind of knowing you have enough money to get through the school year, or plenty of advance warning that you're going to fall short.
  2. Budgets have a negative connotation for some people, but think of them as a way to ensure you won't run out of money before you run out of months. A budget is a tool that will help you manage your money and keep your spending under control.
  3. To create a budget, list your sources of income, such as savings from your summer jobs, financial support from your parents, financial aid, scholarships, and job income. Then list your expenses, such as tuition, books, fees, groceries, gas, and entertainment in as much detail as possible. If your expenses are more than your income, find ways to cut costs or increase income.
  4. Make a list of your needs (rent, food, utility bills, basic phone bills, car payments, insurance, textbooks) and your wants (entertainment, name brand jeans and other clothing, jewelry, eating out, drinking, expensive perfume or toiletries, CDs, electronics, keg parties). Add up the cost of a month's worth of these items and subtract the total from your monthly income. If there's not enough money to go around, start whittling away at the wants, choosing only those that are the most important to you.
  5. Be sure to provide for some entertainment in your budget. The idea is to know how much money you have compared to how much you need, not to totally deprive yourself of life's little pleasures. It's all about balance and making wise choices that benefit you the most in the long run. If you totally deny yourself now, you're more likely to splurge in a big way later.
  6. Once you've created a budget for the semester, you'll know how much you can afford to spend each week for each expense category. Track your actual expenditures, and if you go over in one category, find ways to cut back in others to make up the difference. If you spend too much early in the semester, you'll end up living on ramen noodles later.
  7. When planning your budget, make a few phone calls to find out if there are any fees you may not be aware of that will be added to your tuition bill. Some classes charge extra for course materials or laboratory fees. Being prepared for these additional costs ahead of time can help you avoid a budget shortfall later.
  8. Financial aid is usually disbursed at the beginning of each semester, so for a little while you'll feel flush with cash. Don't let this illusion encourage you to overspend. To make your money last, figure out how much you can spend each month and don't exceed this amount.
  9. If a month seems like too long a time frame to budget for, divide your monthly income by the number of days in the month and use that as a guideline for how much you can spend each day. If you spend more on the weekend partying or socializing, cut back for a few days until you've made up the difference.
  10. Find a budget method that works for you. With the Envelope Method, once you decide on the expense categories you want to track, you place cash in each envelope according to how much you've budgeted for that category for the week or month. When you run out of cash in an envelope, you're done spending money in that category until your next budget period. This low-tech method is a good idea only if you have a secure place to keep the envelopes containing the cash.
  11. If the Envelope Method of budgeting doesn't appeal to you, try the Notebook Method, which involves setting up a notebook with a separate page for each of your expense categories. Write the amount you've budgeted for the week or the month for each category. As you spend money, record the purchase in the appropriate category and subtract it from the starting balance to see how much you have left. This method always gives you a quick snapshot of where you stand, but takes daily or weekly recording of your spending.
  12. If neither the Notebook Method nor the Envelope Method of budgeting works for you, try the Receipt Method. Keep receipts for each purchase. At the end of the month, total each expense category and compare it to your budget to see where you need to make adjustments. This method requires less frequent recording of your spending but may result in some big unpleasant surprises at the end of the month.
  13. Plan ahead for large upcoming expenses. It's easier to save $50 a month than to come up with $200 at once. A little advance planning will give you the peace of mind of knowing you won't be strapped for cash and unable to pay your bills when they're due.
  14. Try using personal finance software like Quicken or MS Money, which often comes installed on new computers or can be bought separately, or Mvelopes, a software-based budgeting system. You don't need to use all the bells and whistles, so use only the features you have time for. Just using the checkbook feature will allow you to generate reports showing your spending by category, complete with graphs. Knowing where your money goes can help you control spending.
  15. Think of budgeting as a game or a contest that you play against yourself. Make it fun or challenging so you'll stick with it. See how much you can save by cutting costs, and then give yourself a small reward when you do well.
  16. If your parents are providing you with spending money, ask them to deposit it in your bank account weekly or monthly. You're on your own for the first time, and it can be hard to resist overspending when you have a big chunk of change in one lump sum. Spend it early and you'll find yourself pleading with Mom and Dad for more dough or living on boxes of mac and cheese.
  17. Keep a record of any unexpected expenses you incur. Use this information to update your budget and improve your future expense projections so you have a more realistic picture of your spending and your financial needs.
  18. If you look at your expenses on a weekly basis only, you won't get the perspective you need about your spending. Do the math to get a more realistic view. That $25 a week for beer and chips is $1,300 a year! If you're using your credit card to pay for it, add interest to that total. If your job pays $8 an hour, you'd have to work 15 hours a month just to net enough to cover your beer tab.
  19. Save money regularly. You may only be able to manage a few dollars a week, but getting in the habit of putting aside money to fall back on in a crunch will serve you well for the rest of your life. If you work, pay yourself first by making a deposit into your savings account before you spend any of the money. If you don't work, set aside a portion of your summer job money or the funds your parents provide.
  20. Even students should have an emergency fund. If you can't come up with a big stash all at once, put away as much as you can each week or month until you have $500 or $1,000 that you use only for emergencies. When you have an unplanned expense, like a car repair, you won't have to go into debt and incur interest to pay for it.
  21. Save the pennies and the dollars will save themselves. Have you ever saved your change over a period of time and then cashed it in and been surprised at how much you had accumulated? Just as spending small amounts a little bit at a time adds up to significant sums, so does saving small amounts.
  22. If you're making an effort to control your spending and you blow your budget in a moment of weakness, don't beat yourself up about it. Buckle down over the next week or several weeks to make up the difference and get back in control.
  23. Each week, plan your expenditures for the coming week. Allow yourself some money for entertainment and recreation as well as for food, transportation, and any bills that are due, but make sure you budget within your available funds. Start fresh each week and review everything at the end of the month.
  24. It's difficult to manage your money if your paperwork is in a state of disarray. Find a box or use a plastic storage container available at discount stores to set up a simple filing system with folders for Bills to Be Paid, Paid Bills, Financial Aid Information, Bank Accounts, and any other subjects that fit your needs. When bills arrive, open them immediately, check them for accuracy, and stick them in the Bills to Be Paid folder. Go through your folder every week or so to see what needs to be paid.
  25. Your family is probably your most important financial resource, and they're probably making sacrifices to send you to college. Don't squander your parents' hard-earned money by spending frivolously or making financial mistakes and expecting them to cover for you. Show your appreciation and respect the contribution they're making to your future by managing your money wisely.
  26. Keep receipts for everything you buy. When it's time to update your spending plan (aka, budget), you'll have the receipts to jog your memory.
  27. If you don't believe that small amounts can add up to huge sums, think of the episode of Sex and the City where Carrie finally did the math and realized she could have bought a condo with the money she'd spent on her collection of Manolo Blahnik designer shoes. It's the small amounts that will get you into trouble because you don't think they matter. That's why recording all your expenses is important. It's the only way to get perspective on your spending.
  28. Key areas students can be economical about while in college include food and drink, telephones, and clothing. Does it make sense to spend $20 a week on beer ($80 per month, $720 per school year) or $100 per month ($800 per school year) on long-distance phone charges? Control your spending in these categories and you won't have to borrow as much to get through college.
  29. By keeping track of even your small expenditures, you'll better control your spending because you'll be more aware of where your money goes and how quickly the little things add up. It's easy to dribble away hundreds or thousands of dollars, a few dollars at a time, if you don't track your spending on paper or computer.
  30. When calculating how much money you'll need to get through a school year, don't forget the cost of getting set up in your dorm room. Most students buy lamps, fans, minifridges, microwaves, computer desk and chair, bedding, power strips, extension cords, carpet, an answering machine, and other electronic devices, which can add up to nearly $1,000 in one pop. You don't have to buy it all new. Check out lawn sales and thrift shops and ask your family for donations.
  31. Plan for expenses like clothes, toiletries, cosmetics, perfume, and other favorite products. These add up quickly, and if you're used to your parents buying many of these items for you, the price tag may be a shock and you may blow your budget.
  32. You'll curb your spending naturally just by tracking what you spend your money on. Awareness helps you make better decisions about the little things that add up to big amounts. If you have no idea that your daily Starbucks habit is costing you $1,100 for the school year (at $4 per day September through May), how will you make smart decisions about the things that matter most to you?