How do I manage my monthly expense budget while in college?

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Answered by: Audrey, An Expert in the Finances and Money Category
Maintaining a stable monthly expense budget while in college isn't easy. If it is your first time away from home, there is often a big adjustment period that you will go through, both financially and socially. Keeping on top of your monthly expenses is a very important part of your college years, and should be taken seriously. During this time of change, you will be forming many habits that will be carried into your adult life, so it is important to use this time to establish a successful and responsible framework for budgeting and money management. Failing to do so can only lead to problems, throughout your schooling and later in life.

One of the best ways to stay out of trouble with your bank account is to develop a monthly expense budget, and be committed to sticking with it. In order to do this, you have to know where your money goes. Try keeping a list of your purchases for a few weeks, whether you use cash, checks or a debit or credit card. This list should give you a good idea about your spending habits. Then, do the math to estimate how much you would have spent on those items over the course of an entire month. You may be surprised at what you find by doing this. If most of your money goes to entertainment, clothing or beauty items, eating and drinking out, or other similar categories, you may want to think about giving yourself a spending limit in those areas.

For example, if you like to go out to dinner with friends or family, decide how many times a month you would go out and how much you would be willing to spend each time. Then, calculate the cost per month and don't allow yourself to spend more on restaurant meals than the amount you've chosen.

While purchases such as food and entertainment may account for a large part of your spending, don't forget about any bills that you are responsible for paying monthly. If you live on campus at your college, you may have little or no bills to pay each month. Living off campus usually means you're paying several bills each month, and they can quickly eat up most of your funds if you don't account for them each month. Make a list of your monthly bills and add it to the list of expenditures that you previously made. If you have bills that are not the same amount each month, such as phone or utility payments, always calculate your cost based on the most you've spent on that bill. This way, if your bill is little bit higher than you expected, you won't be short on funds to pay it.

You may also want to account for a monthly deposit into a savings account. This is a great habit to get into while you are a student. Even if you only save $5 or $10 each month, having a savings account can be a huge benefit later on. As you become more financially stable and earn higher-paying jobs, you can increase the amount of money that you put into savings each month. Doing this will provide you with a safety net if there was ever an emergency that you needed to pay for, and could also be the beginning of your down payment on a house, or even your retirement fund. Once you deposit money into this account, though, make sure you don't take any of it back out. There should be a one-way flow into this account, unless you need to draw from it in an emergency.

Now that you have your costs listed, add them up. The total amount will probably surprise you, if making a monthly expense budget is something you've never done before. At this point, it would be wise to go back over your flexible expenditures, such as food, entertainment and clothing items, and see what you could live without. College is one of the most engaging and experimental times of growth you will experience, but exploring this new world shouldn't come at the expense of your financial stability.

See how much less you would be willing to spend in the areas that may be problematic in your budget, and try to stay within those limits. Finding cheap or free activities to do with friends can be a great substitute to eating out or going to the movies, and can save you a lot of money each month. Try going to the beach, having a picnic, watching a movie at someone's house or visiting a local museum as a fun alternative.

Making a monthly expense budget may seem tedious or unimportant, but it can mean the difference between an enjoyable college experience and years of financial debt. Creating healthy spending habits now will benefit you, as well as the family you may create later on. Expect to make some sacrifices now in order to prosper later. Everyone has their own personal way of managing their monthly budget, and it may take you a while to find what works for you. Don't give up! Keep on top of your expenses and you will have one less thing to worry about when final exams roll around.

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