Creating a Budget

Carefully crafting a budget can help you live in the present and prepare for the future.  What are your goals?  What will it take to achieve those goals? 

When you are creating a budget, you need to know your current spending habits. This can be a hard reality to face.  Start by simply tracking all of your expenditures using past bank and credit card statements.  Before you can truly adjust, you need to know where your money is going. 

If you do not have good records, start now to track every cent you spend for 30 days.  Now categorize those expenditures:  housing, utilities (electricity, water, gas, internet, television, telephone), groceries (vs. dining out), auto expenses (fuel, taxes, service, insurance), personal (haircut, clothing, laundry, gym), medical (insurance, doctor, medicine), entertainment (games, movies, sports).

Create a list of all resources such as financial aid (using net figures), savings, contributions from family or other resources.  Remember that in some cases your cost of attendance budget is only for 8 or 9 months, not a full 12.  How will you handle the time between terms? 

Now take your list of expenses and separate by what is truly a necessity versus a want.  What could you do without while you are in school?  Where could you make changes?  Can you live in a less expensive apartment?  Can you find a roommate to share your space?  How can you reduce your utilities?  Do you really need cable television, or can you make do with the internet which is needed for school?  Can  you fix more of your meals and cut out fast food and Starbucks?  How low can you go? 

Remember you can live like a broke student now and reduce your indebtedness for the future, or live like a broke student for years to come.  There are plenty of horror stories about student loans gone wrong, but there are many more of those who have successfully repaid their loans and moved forward with their lives.  The difference can start with the budget you create and the choices you make.