Budgeting Tips for Graduate Students

Being a college student and budgeting go hand in hand. Most college students are not independently wealthy yet. Normally at eighteen or nineteen years old, you don't yet have significant financial resources at your disposal. Many college students may not have financial support from their parents either. Parents may foot some of the bill, but not all of it, and, in some cases, none at all.

The idea is not just to get a financial aid package, but also to be smart with your money. Young college students may have no experience dealing with the tens of thousands of dollars that go into college tuition, room and board, and other expenses. In some sense, college students need to be financial managers in addition to students. This is a tall order.

As a college student, you need to learn how to set a budget. What this means is that you must determine how much you will have for the year and then subtract expenses: tuition, room and board, books, supplies, and entertainment. The last is an important one. You don't want to break even before you have some extra spending money for extracurricular activities. In a typical budget, it's ideal to have a fair amount after the essentials have been paid for.

Of course, this is the ideal situation. If you only break even every month, your budgeting demands need to be much stricter. You'll need to watch every dime being spent. You could buy several cups of coffee a week and that could come out to $25. That may not sound like a lot but an extra $100 a month can quickly build up, especially combined with other expenses. You must find a way to keep track of where your money is going and how much you have left.

Managing Your Money

Because the small expenses add up, you should factor these into any budget. College students make the mistake of only balancing their checkbooks--i.e. only adding together the checks they have written. This doesn't account for out-of-pocket expenses, which can be a significant amount. In the worst-case scenario, it can lead to bounced checks. So keep a log of all your expenses. This will have a two-fold purpose. First, it will let you know how much you're spending. More importantly, it will slow down your spending habits.

You shouldn't only set a budget for the year, but on a monthly, weekly, or even daily basis. This way you won't make any major purchases early on which will affect your budget many months down the line. You need to pace yourself like a marathon runner.

College students are known to be credit card crazy. This can seem like "free" money. The student is able to make major purchases without taking a major chunk out of the bank account. It's important to careful with credit cards. Student credit cards may not have the best APR, so most of the payments will go to interest. If you miss a payment, it can have a drastic effect on your credit rating. Credit cards are a good idea, just use them wisely.

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