Budgeting For College, Should You Order Pizza or Not?
Date: August 22, 2023
“Having a budget, for many, has a straitjacket connotation,” says financial expert Dave Ramsey. However, he says, “This is the wrong way to view a budget or any cash flow plan. Having a budget doesn’t mean you can’t order a pizza when you want one. It just means that you have a plan for your money. If you like pizza that much, put a pizza line on your budget,”1 Ramsey says.
It’s About Whether You’re Securing or Robbing Your Future
Besides equating them to straight jackets, some view budgets as non-realistic. This is especially true when living under the poverty line. After all, if one’s outgo constantly exceeds one’s take-in, who wants to go through the pain of charting the obvious? But even if your bottom line isn’t robust, not having a money plan now may cause financial failure later.
So while allocating to buy ten mac ‘n cheese dinners rather than 20 is a moot point, fiscal responsibility is crucial for avoiding unnecessary debt. It is needed to maintain a balanced life. Therefore, budgeting in the now is essential.
To begin with, remember preparing a college budget requires an inventory of expenses and income.
1. Calculate All Expenses
Firstly, it is crucial to calculate all the associated expenses for attending college. Moreover, consider what is needed to get through. Typical college expenses include:
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- Tuition: By Year, Class Dues
- Textbooks: Online Programs, Computer Program Subscriptions
- Phone: Monthly Plan, Fees
- Housing: House Payment or Rent
- Clothing: Shirts, Shoes, Pants, Skirts, Blouses, Uniforms, Socks/Underwear
- Utilities: Water/Sewer, Heat/AC (if you have AC!), Electrical, Internet
- Transportation: Car Payment, Car Insurance, Gas, Upkeep, Tolls
- Food: Cafeteria, Groceries, Eating Out
- Toiletries: Toilet Paper, Cleaning Supplies, Grooming supplies
- Childcare: Daycare, Field trips, Child Support
Of note, many colleges may offer a tuition calculator. The tool helps reduce anxiety and guides you through itemizing your current and future expenses. Using this helps students create realistic budget plans. This is because they may comprehensively analyze their expenses.
2. Assess All Income
Secondly, remember in addition to estimating expenses, it is essential to assess all available income. Often students rely on various incoming sources. Generally, these include:
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- Scholarships
- Grants
- Work-study programs
- Financial support from family members. (Read our loving moms and dads!)
- Scholarships
Considering the fluctuating nature of these sources, estimating one’s income conservatively is recommended. This approach ensures that you are roughly prepared for any unexpected changes in aid or employment. Moreover, the key is to be realistic. Provide a buffer should the unexpectedness of life have its way.
Another income source is work. According to the National Center for Education Statistics, “74 percent of part-time undergraduates and 40 percent of full-time students in the U.S. were employed in 2020.2
“Through the Federal Work-study Program, some students receive financial aid for working during college. Moreover, this program is offered to students who display a need. Need is assessed using the Free Application for Federal Student Aid, or FAFSA.”2
3. Know How Much You Can Realistically Work
Thirdly, know how much you can work with your new schedule. While working helps defray costs, assess how much you can realistically work while undergoing your program. You may gauge this well by speaking with current students and teachers. Generally, a good practice is to calculate as follows.
a) Assume that for every hour in the classroom, add at least one to two (1–2) hours of outside time. This is for doing homework, studying, and other academic activities to support classroom time.
b) Keep in mind, if you need to work a great deal, try to find a job that adds to your life. This should be in a capacity not met at school. For instance, if you sit all day during school, could you work at the gym, where you might also benefit from some exercise? Or, if you’re lucky, try to find a job with flexible work hours to juggle college life.
c) By and large, be honest with your employer. At the start, tell them you plan to attend school and that your program may be rigorous. Normally, candidness is appreciated. They may be more willing to be flexible and work with your schedule (especially great during intense study sessions or finals week!).
4. As You Plan, Prepare a Budget
Fourthly, plan ahead. It’s crucial to outline a budget plan balancing expenses and income.
a) To begin, list all your essential living expenses in order of priority.
b) Look for hidden or not-so-evident places where you might save money. I.e., do you need to pay rent, or would your parents’ basement realistically work? Or could you live in an RV for several years rather than rent an apartment?
c) Next, allocate funds for textbooks and academics. Are used books available? Can you get a discount on your apps or subscriptions? Do you really need Netflix?
d) Yet, before you shore up the budget, remember to include some items for your mind, body, and spirit. Recognizing the importance of your mental and physical well-being and allocating resources for healthcare, nutrition, and recreational activities is vital to staying within the budget course.
Living like a stoic or miser may work short-term, but it can be difficult to maintain over the long haul. If you need to order a pizza to get through finals, put it on the list. Truthfully, accessing these comfort items is paramount to staying in school too.
5. Go Over Your Budget Figuring Wants Versus Needs
Fifthly, take a non-biased look at what you really need. One key takeaway is understanding the difference between “wants” and “needs.” Food in the way of affordable groceries is a need, but Uber deliveries or eating out at nice restaurants falls under “wants.”
Be brutally honest with your outflows and determine if there are areas of your life where you can cut back, such as multiple streaming subscriptions. Short-term sacrifices to help sock away more money or to reduce costs while going to school can pay long-term benefits through lowered student loan payments.
Students can effectively manage their finances by creating realistic priorities and avoiding unnecessary overspending. School is stressful enough; don’t compound the problem with worries of high expenses or uncertainty about affording the rent while going to school.
6. As You Go, Track Expenses
Six, track expenses. While you might not think an occasional trip to the movies or extra takeout adds up, these purchases can hurt if they’re not tracked. A key aspect of budgeting for college is to track your expenses regularly. One easy way to do this is to make cash envelopes for each budget item. Using real cash causes you to think before you buy. It also allows you to view your spending at all times. Tip: Make sure you keep said cash in a safe place.
If you don’t want to use a cash system, numerous budgeting apps, online tools, and spreadsheets can assist you easily in keeping up-to-date views of your spending. Budgeting is not about saying “no” or saying how much. It is a planned, methodical approach that assigns where every dollar will go each month. If you want to eat out more often, set aside some of your income and earnings. But most importantly, stick to it!
7. Look For Tangible Ways to Cut Corners
Seven, look for places to cut. Determine where “needs” are really “wants” and cut back where possible.
a) Buy used or refurbished instead of new.
b) Do fun activities for free, like hiking or walking in the park.
c) Consider making your coffee at home rather than going to coffee shops.
e) “Brown-bag” your lunches rather than eating out.
Regularly reviewing your spending patterns can identify potential areas where cutbacks can be made. You can also use caution when you might be spending too much. Remember, it’s flexible and fluid.
8. Remember, It’s a Flexible Process
Lastly, be mindful that budgeting for college should be a flexible process. Remember, your budget is only a tool, and it can be fluid and flexible–as long as you are true to its intent. Circumstances may change throughout the academic year, necessitating adjustments to your plan. You can ensure your budget remains realistic and effective by monitoring your finances and making necessary revisions.
Ultimately, there are financial professionals; talk to them! Colleges host financial aid advisors who can provide guidance on budgeting strategies. These may be tailored to individual needs and circumstances. They can help you locate available public and private financing options, as well as grants, scholarships, and more.
Conclusion
In conclusion, budgeting for college is an integral skill that every student should cultivate. College students can effectively manage their financial resources by estimating expenses, assessing income, creating a balanced budget plan, tracking expenses, and remaining flexible. Through careful planning, students can minimize unnecessary debt and achieve a more balanced and enjoyable college experience.
Also, remember that one day you’ll be finished with school. If you’ve planned for your future wisely and budgeted with a “less now for more later” mentality, you can order lots of pizza–with all the toppings!~
Citations:
1 Taylor, Heather. “Dave Ramsey: The “Totally Wrong” Reason Why People Don’t Do a Budget.” GOBankingRates. August 9, 2023. (Accessed August 11, 2023.)
2^a, b Kerr, Emma. “The Pros and Cons of Working While in College.” US News & World Report, U.S. News & World Report. December 30, 2020. (Accessed August 11, 2023.)
