Freedom or Chains- College Students Need to Manage Their Money
Managing Your Money Will Break the Chains of Debt and Set You Free
Generally speaking, when we think about college life we think freedom and fun. Though, there is nothing fun about daily stressing over your finances and there is no freedom in being chained to an ever-increasing pile of debt. Money management is a necessary part of a stress-free college life. You're going to have to start sometime in your life and the sooner the better.
<b>What students ought to know about managing their money:</b>
In order to manage your money properly you must create a budget. Budgets help you form a realistic plan for spending (and saving!) your money. Since your income and expenses are constantly fluctuating, whatever budget you decide to use needs to be flexible.
First, write down where all your income comes from. This can include income from a job, grants, scholarships, allowance from home, etc. The second step you should take is writing down all your expenses. This is much easier if you divide them into two catagories: fixed and flexible.
Fixed expenses are exact amounts due on a specific date that don't change. Flexible expenses are amounts of money that fluctuate depending on your needs and wants.
<b>Example Fixed Expenses:</b>
- Rent
- Car payment (including insurance)
- Health insurance
- College Tuition
- Cell phone
<b>Example Flexible Expenses:</b>
- Books and various school fees
- Gasoline and maintenance for your car
- Going over on your cell phone minutes or long distance telephone calls
- Social expenses (movies, dates, football games, etc)
- Personal expenses (clothes, groceries, doctor and/or dentist bills, domestic supplies, haircuts, etc.)
Add up the amount of income and expenses you have. Now look it over. Do your expenses exceed your income? If this is the case, you should think about how you can increase your income or decrease your expenses (or a little of both). This is simple but essential if you wish to stay out of the hole during your college years.
Lowering your expenses will probably require some sacrifice. A great deal of college students are used to impulsive spending. This type of poor money management leads to financial slavery. Here are some helpful tips that will assist you in reducing your expenses:
- Pay your bills on time
- Watch out for peer pressure
- Purchase used text books
- Shop at discount stores
- Look for sales
- Stop eating out and buying junk food
- Share an apartment
Everybody is going to need a different type of budget to fit his or her individual needs. However, basic budgets can be found all over the internet, in finance books or you can simply ask your parents to give you some ideas. Don't let debt to enslave you. Form a budget, stick to it, and be okay with sacrificing a little to stay out of debt.
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About the Author
To learn more about money management visit our Managing Student Debt page. A college student herself, Elise Fisher enjoys writing articles to help college students learn more About-Student-Loans
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