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A big part of living independently is managing your own finances. This means having your own bank account and perhaps a credit card as well. When you are fully managing your own money, you have to decide what to spend money on and you must balance necessary expenses, like tuition, textbooks, technology, housing, and food, with extra expenses, such as new clothes, going out with friends, or decor for your new home away from home. The toughest thing about budgeting is that there is no foolproof guideline to how we should be spending our money. It’s important to enjoy life and treat yourself to special things occasionally, but if it means you can’t pay your cell phone bill or afford groceries, then you may be spending too much. If your bank account gets too low, you are left with 2 options: make more money or spend less.

Creating a budget is a great way to set limits for how much you will spend each month and as a way to track your spending. The idea is to make a budget and stick to the limits in each category. For example, if you have a certain amount put aside for coffee, make sure you don’t spend more at Starbucks than you budgeted for and don’t go buying running shoes with that money (unless you’re willing to forego your coffee!). Keep receipts, bills, and lists of your income and expenses. At the end of each month, calculate how much you actually spent on each budget item (such as groceries or entertainment) and record this on your budget. Was it different from how much you planned to spend? You may want to adjust your budget a few times based on your needs and spending patterns, but eventually, you will settle on a budget that works for you.

It’s also important to keep in mind that your personal budget won’t look the same as someone else’s. Different individuals have different spending priorities and come from different backgrounds, so try not to compare or conform your spending to others’ finances. Our society is comprised of enormous financial inequities and varying economic situations. Therefore, it’s best to focus on your financial situation and priorities and practice a budgeting system that’s unique to your needs rather than trying to adopt other students’ lifestyles for the sake of ‘fitting in’ with a certain crowd.

Creating a Budget

When making a budget, you make note of the expenses that you anticipate having for a specific time period i.e a month, semester, etc. Think about your spending in categories, such as the following:

• School expenses (tuition, textbooks, computers, etc.)
• Living expenses (housing, groceries, utilities, phone, etc.)
• Personal expenses (shopping, entertainment, eating out, etc.)
• Transportation expenses (bus pass, travel home, vacations, etc.)
• Debt expenses (paying off loans, student debt, etc.)
• If you don’t know how much you’ll spend in a certain category, think about past spending, or track your spending for a month to see how much you spent.

You will also need to add your income to your budget. Income can come from a job, savings, scholarships or loans, or from family contributions. Once you add in your income, review if you have enough money each month to cover your expenses. If you are spending more than you want to, think about where you can save money: going out less, switching to a cheaper cell phone plan, or buying used instead of new items. Or you can look at ways to increase your income: with a part-time job or finding other sources of money. There are a lot of scholarships and bursaries out there to help students pay for school; apply to as many as possible to get free money to pay your expenses!