Often, college is the first time students experience managing their own money without the help of an adult. By this time of the semester, most students have already received their Spring financial aid refund. While it may be tempting to spend that money on a grand shopping spree or buy that new big screen TV you’ve been eying, it’s important that you budget those funds to cover educational and living expenses over the course of the semester. The refund you receive is meant to be used for the unbilled school expenses, like books, travel, and living expenses. The best way to make sure you are keeping track of your expenses is to create a budget, or a spending plan for the semester.
A budget allows you to organize your finances so that you are in control, and not guessing whether or not you’ll be able to meet your expenses every month. Developing and following a spending plan should be an empowering experience. With a little preparation and determination, you can save yourself a lot of money and stress!
Let’s take a look at this scenario: You have received $4,650 in a financial aid refund. You live off campus so you will need this refund to pay for rent, utilities, also other living expenses throughout the semester like food, and transportation costs.
Start by estimating your expenses for the next couple months and include the semester totals:
If you stick to this budget for the rest of the semester, your financial aid refund will be enough to cover your estimated expenses, with a little leftover for some additional “wiggle room” in your budget. Remember to track every expenditure each month to make sure you are staying within budget so you don’t overspend and come up short after a few months. If you have the option of paying your rent for multiple months at one time, you should take advantage of that to ensure that the bulk of your expenses are already paid for in full. That way you can more easily budget the remainder for your living expenses.
Creating a budget helps you to assess your own spending habits, supports your personal financial goals and in the end, saves you money. If you, like the student in the above scenario, stick to your personal spending plan, you will be able to successfully manage and budget your financial aid refund.
New to the budgeting process? Stop in our office and one of our advisers can help you create a personal budget and spending plan for the semester!