Guide to Budgeting for College Real Cost of Living
BY ELAINE THOMPSON
As a college student, you have a lot of freedom—and a lot of responsibility, especially when it comes to finances. Living paycheck to paycheck can be stressful, but by creating a financial plan and a monthly budget, you can reduce your financial stress and develop valuable skills for the future.
However, a budget is not nearly as useful if you only consider tuition costs, school expenses, and rent. You also have to account for the true cost of living so that you don’t become a “starving student,” accumulate credit card debt, or end up not being able to pay for gas. Read on for a list of tips to avoid the “living gap” in your college budget.
- Plan for Apartment Fees and Furnishings
You probably included rent in your initial college budget, but you may not have thought to include apartment fees, such as application fees, garbage fees, and parking passes. These fees may vary between apartment complexes, so plan a nice buffer for these items.
In addition to apartment fees, remember that you may need to buy or rent furnishings (tables, couches, mattresses, etc.) if they are not included in your apartment. Although these are not regular monthly expenses, you should still take them into consideration for your start-of-year budget.
- Be Smart about Groceries
You may end up spending more on groceries than you do on rent, so this is one item you definitely want to prioritize in your budget. Keep in mind that you will also need to buy garbage bags, toilet paper, and other household items at the grocery store in addition to food. Stocking a pantry with food staples and buying kitchenware for the first time can also be expensive, so be sure to budget for those items as well when you begin college.
Because grocery costs will regularly be a major part of your personal budget, here are some ways to save money on groceries:
- Make a thorough shopping list using an app like Wunderlist.
- Plan meals for the week, add any needed ingredients for those meals to your shopping list, and steer clear of impulse buys that aren’t on that list.
- Buy generic label items—they’re usually just as good as the name brand products and can save you a significant amount of money.
- Keep track of your running total as you shop; if you need to put some items back when you are over budget, you can do so before you get to the checkout line.
- Review Your Subscriptions
We live in a world of countless subscription-based products and services, such as Netflix, Hulu, Amazon Prime, and Apple Music, just to name a few. Ten dollars may seem like a small price to pay for a single service, but the costs of your subscriptions can easily add up if you don’t have an established budget for all of them. If you’re on a tight budget, examine which of your subscriptions are needs and which are wants, then cancel or put certain ones on hold if they’re less important.
As a college student, you can also save money with access to numerous student discounts for subscription services. Many of these student discounts can save you up to 50% off the normal subscription price, so be sure to look for those discounts when you sign up for subscriptions.
- Evaluate Utility Costs
Remember to take the cost of utilities into account when estimating living expenses. Utility costs include bills for water, electricity, gas, and garbage services.
In order to accurately budget for the cost of utilities, you will need to know what factors influence your monthly utility bills. The average cost of electricity alone in the US is $114.03 per month, so plan around that (factoring in whether you’ll split those costs with your roommates). Plus, utility usage may vary throughout the year, so keep that in mind as you figure out how much to set aside.
- Get Practical about Internet and TV
Because nearly all classwork will require internet, you will likely need to have internet in your apartment. Internet costs can vary widely, so make sure to choose an internet plan that balances your budget with the internet speed that you will need for streaming and homework.
If you want to pay for TV, consider up-and-coming streaming services like Sling TV, YouTube TV, and DIRECTV NOW. These services provide a cheaper alternative to cable, and most of these services provide greater flexibility for where and how you watch TV.
- Pay Attention to Car and Transportation Costs
If you own a car or need to take public transportation to school or work, you will also need to plan for the associated costs of transportation. For a car, include everything from auto insurance to oil changes to parking fees in your budget; for public transit, look into costs for monthly city transit passes, as they may be cheaper than paying a daily fare.
- Set Money Aside for Healthcare Costs
While you may be able to stay on your parents’ insurance plan—assuming you’re under 26—it’s still wise to set aside money for unforeseen medical expenses. Doctor visit copays, medication, dental cleanings, and other healthcare costs can add up quickly, and you don’t want to be caught unprepared. Keeping a buffer of a few hundred dollars will ensure you can take care of yourself should the need arise.
- Allow for Discretionary Spending
College and work can be stressful, so make sure you set aside time (and money) to relax, unwind, and have some fun. Depending on your income, your budget for discretionary spending may not be very large, but that’s okay. Whether you use this money for going on dates, shopping, or buying video games, just enjoy what you are doing and be content knowing that you budgeted for it in advance.
- Keep Expenses Together
A budget won’t work well if you can’t keep it logged consistently. Consider using a tool like the Mint app to track your discretionary spending. Mint easily synchronizes with your bank, credit, and loan accounts so that you can track all of your spending in one place. Using budgeting tools like Mint will help you to identify patterns in your spending that will allow you to create a more accurate budget.
Budgeting is a valuable skill. Including the above items in your budget will help you to be well prepared financially for college and your future. ‘
Elaine Thompson is a graduate of Westminster College in Salt Lake City where she got her BA in Communication. Alongside a fulltime job, Elaine enjoys the hustle and writes for multiple online publications.