If you’ve been thinking about earning a degree, there’s never been a better time than right now. With more employers wanting candidates to hold at least a BA, going back to school is one of the best ways to advance your career.
Depending on your financial picture, you may need to rethink how you spend money, especially if you plan on attending school full-time and only working part-time. Creating a budget, one you can live comfortably on doesn’t need to be painful. You just need to know how to do it. In this article, we’ll be providing undergraduate students with a few tips to help them create a balanced budget.
Itemize Your Expenses
When creating a budget, you need to begin by itemizing all your expenses. If you’re just starting to learn financial lingo, itemizing is when you list off your expenses. These expenses can include rent, groceries, bills, and debt payments. When it comes to debt payments, it’s important to go over how you’re going to pay for your undergraduate’s degree.
Since college is an expensive investment, no matter how you go about it, there’s almost no way around paying tens of thousands for your education. The most common way of paying for a college degree is to take out a student loan.
Ideally, you’ll want to aim for a subsidized loan, which comes with additional benefits than an unsubsidized loan. But remember when we said there’s almost no way to get around paying this cost? That’s because you can also consider applying for a scholarship as well.
Scholarships allow students to attend college at virtually no cost. The only real price students must pay is maintaining a high GPA. Furthermore, you need to thoroughly research your options as not every scholarship covers the entire amount. There are a select few that may cover up to half, which would leave you to incorporate the rest into your budget. Listing off all your expenses can give you a more in-depth look into how much you’re paying. You can uncover any hidden payments that are eating away at your savings and deal with them accordingly.
Calculate Your Take-Home Pay
How much you spend is only half of the process; you need to calculate how much you’re earning each month from your job. Suffice it to say you’ll be spending the majority of your paycheck to afford your monthly expenses.
So, you might be wondering how you can have any kind of savings. The whole idea of a budget is to maintain a balance between what you spend and how much you can save. However, this isn’t always easy to accomplish.
In fact, there are even established professionals who still struggle with budgeting to this day. But budgeting also doesn’t have to be some long-winded and complex process either.
If you’re having trouble figuring out the structure of your budget, you can use a specific method instead. To be more specific, you can use the 50/30/20 method. How it works is that you take 50 percent of your income and pay for all the expenses we mentioned earlier.
Once that’s taken care of, you can use 30 percent to buy anything you want such as dinner out or that movie you’ve had your eye on. Finally, you put the remainder directly into your banking account as savings. This can help you build financial security over time.
Be Realistic About Your Spending Habits
The freedom that comes with college is exhilarating. You can do whatever you want without anyone telling you otherwise. It’s easy to get caught up in the moment and wildly spend your hard-earned cash.
You’ll never have any kind of financial resilience or savings when you’re constantly spending it. As you create your budget, you need to be honest about any out-of-control spending habits you have.
Set Monthly Spending Limits
In order to faithfully stick to your budget, you need to set spending limits for yourself. This means you can only spend a certain amount of money each month. If you go over the limit you set for yourself, you risk throwing your budget out of proportion. The 50/30/20 method is a fantastic way to limit yourself because you only have 30 percent to play around with.