Understanding Wants vs Needs

Before you can create a budget, you must understand that you will have to make sacrifices to reach your financial goals, and a major component of creating a budget is separating your wants from your needs. Courtney Neidel the Assigning Editor and Author for NerdWallet breaks these down as “Wants are expenses that help you live more comfortably. They’re the things you buy for fun or leisure. You could live without them, but you enjoy your life more when you have them. Needs are expenditures that are essential for you to be able to live and work” There can be a massive variation in what college students are responsible for paying for and this article is focused on creating a budget around your wants and expectations of college.

How to Create a Budget as a College Student

To use the budgeting system, below write down how much you have saved (or what you are willing to spend this semester) and calculate what you think would be your average expenses for one week. Subtract your emergency savings from your total amount saved to get your spending cash for the semester. Next, multiply your weekly expenses by how many weeks you plan to stretch your budget (A typical semester is 16 weeks) to find your total planned expenses for the semester. Subtract your semester expenses from your spending cash, if you get a negative number, you are overspending and will run out of cash before the end of the semester. If your current spending is sustainable through the semester, you will have some cash left over. If you find that your savings will not last, you the semester you need to monitor your spending, decide what is a want and what is a need, and cut back on spending.

6 Tips to Spend Less in College

1) Set your Spending Limit in Advance

When you are putting on your best fit and getting ready to go out, plan for how much money you can spend tonight. Without a spending plan, you can easily convince yourself to buy that last round of shots for yourself and your friends and blow your budget. You must be accountable for your budget or you are wasting your time.

If you continue to overspend, find an ATM close to campus and pull out your weekly allowance of spending money and leave your card at home.

2) Follow the Deals

Almost everyone in college is facing the same financial problems as you, don’t be scared to suggest that you and your friends go to the bar with drink specials that night. It might not be your favorite drink, but it can be an excuse to try something new and cut down on spending. A great place to start is by joining local Facebook groups or finding your favorite bars on social media and checking to see if they posted a deal for the night. Ask other kids on campus about what deals they are aware of, as food and drink deals often decide where the popular bar will be for the night.

This also applies to going out to eat, following the deals can lead you to try new restaurants or order something you have never tried before. Once you're familiar with your off-campus options you can find a drink or food special for just about every night of the week.

3) Avoid Late-Night Eating

It's tempting and we have all been there – leaving the bar or party and just heading straight to Taco Bell to spend another $20 just to appease your drunk appetite. The issue is you don’t have that additional $20 in your budget and getting food after every time you go out adds up quickly. Eating that low-quality food isn't going to stop your hangover, grab some water and skip the fast-food bill. Once again if you know you're going to be hungry after going out plan for it, grab an extra meal from the dining hall and stick it in your fridge or be prepared to make something quick in your room.

4) Going Out? Maximize the Pregame

Buying drinks at the bar can be 10 times the price of buying your drinks. When you find yourself overspending at the bar save money by spending more time at the pregame and not worrying about being the first one at the bar. Spending more time at home will lead to buying fewer drinks at the bar. Don’t overdo it and get too drunk before going to the bars but getting a buzz at the pregame can cut down on how many drinks you are buying.

5) Be Safe, but Avoid an Uber if You Can

Drunk driving is not an option, but the cost of an Uber can exceed the price of an entire night out. Walking is the cheapest option and by now you are used to walking the miles across campus and can do the same to get yourself home from the bar. It's important to understand when it is safe to walk and save money and when Uber is a necessity. When an Uber is necessary fill up those seats, finding friends to split the ride with you can drastically reduce the cost. Yet if it’s a reasonable walk back burn off those drinks with a sobering walk back to campus.

6) Sorry but, Get a Job

Every university relies on student workers for simple jobs and tasks around campus. This means there are always job openings. It might not be your dream job, but I'm not saying to work 40 hrs. a week, picking up a part-time job and working just 10 hours a week can give you the funds you need to feed your habits and balance your budget. These jobs can be found posted on university job boards and are often super simple jobs that just require you to show up.

Seems Easy, Right?

There's a fine line between having fun in college and being irresponsible. By creating a budget and following some of the tips above you can responsibly attack college. It's never too late to start tracking your spending and creating a budget. Yet it's important to understand that not everyone you will meet in college will have the same financial goals as you, and there will be times that you have to make decisions based on your situation. This can cause major fear of missing out, but I promise you it's not worth it to go broke buying another round of shots. Getting ahead of your finances now will create an advantage for you in the long run.