The swelling music of graduation is just a memory. The summer filled with final hangouts and somber goodbyes are behind you. You’ve gone to the store and bought the necessities to fill your dorm room. Now, ahead of you is taking your first steps into adulthood and attending college.
Being on your own really means being on your own. You need to be responsible for a lot of things, including getting to class, managing your workload, eating healthy, and making a support system. One major item that gets forgotten between the orientation, the moving, and the mixers is you’re in charge of your own finances now. But don’t worry, we’ve got some advice to make sure you don’t blow your savings while at college.
Tracking Income, Savings, and Expenses
Before you can start managing your finances, you need to know what you’re working with. What type of money do you have coming into your bank account, how much do you have saved, and what regular expenses do you have?
The first part is tracking your income. Do you have a part or full-time job? Are you doing a side hustle for some extra cash? Is your family sending you cash regularly to help pay for school? This is all income and you need to know how much you are earning monthly.
Next, you need to see how much you have in your savings. Whether it’s a piggy bank filled with coins, a graduation party check from grandma you never cashed, or a savings account, you need to figure out how much you have saved. If you do have your savings spread around, consider consolidating it in a Pioneer savings account to have it all in one place.
Finally, you need to figure out your expenses. This might take a little bit of time to figure out as you get used to college life and find out what you have to spend money on. The standard expenses everyone has to pay are: food, rent, transportation, clothing and supplies. Some of these you can figure out on your own, while others you need to track for a month or two.
Build a Budget
After collecting your information, it’s time to put it together into a budget. A budget puts your financial situation into hard numbers and helps you view the reality of your situation.
First, list out your regular monthly expenses you are currently paying. This includes rent, food, transportation, etc. Anything you are regularly spending money on should be listed in the budget. This should reflect how much money you have going out every month.
Next, list your income. Put all the money you have coming in into a single number. Ideally, your income should be larger than your expenses, but it might not be possible. After all, you’re a busy college student going to school, you don’t have tons of time to make extra money.
Finally, list out your current savings. This is important to remember as a resource that can help cover some expenses, but should be used sparingly. View it more as a parachute in case of emergency, not money to spend on frivolous items.
Need help putting the budget together? Pioneer members get free access to financial counseling and guidance through GreenPath. Their financial counselors can walk you through building your budget and give helpful advice to stick to it.
Slashing Your Expenses
Likely, your amount of expenses outweighs your income, especially if you don’t have any income, because again, you are a busy college student. Don’t stress, it’s not the end of the world. You can get through this.
The next step is to slash your expenses wherever possible. You’re going to lose some money, let’s minimize how much. Look through your expenses and how you are spending money for areas you can trim and cut.
Are you going out to eat regularly? Are you buying new clothes not on sale? Are you spending a lot of money on experiences like concerts, parties, or movies? These are all areas where you can cut spending and save money.
Examine every part of your day and try to save money whenever possible. Maybe walk instead of drive to class, buy store brand groceries instead of name brand, and skip the expensive meal out with friends.
Cutting out as many expenses as possible can really help you stay out of debt and prevent using up all of your savings. It’s time to get thrifty and smart with your money so you don’t find yourself in a dangerous situation.
Finding Less Expensive or Free Options
College is a unique experience compared to the rest of the world. There are tons of free and cheap opportunities to take advantage of. Depending on what college you’re attending, you might have options like a cheap meal plan to take care of food, free shows and music concerts, or even free transportation around town through a school bus pass. Shop at places with student discounts to save a few dollars here and there.
For other expenses, you might need to get a little bit creative. Did your parents kick you off of their Netflix account? Rather than getting your own basic account for $8.99, get three friends together and split the cost for a premium account for $4.49 each. Don’t want to drop hundreds of dollars on textbooks every semester? Buy used books, find virtual versions of it, or even share a textbook with another student and split the cost.
Start Building Your Credit
If you’ve never had a credit card or paid for a car loan, it’s likely you have no credit. Having a good credit score is important for many important life moments, like buying a car, a home, or even getting a job. College is a great time to start building your credit for the future.
Get a credit card, then use it when buying normal items, like groceries or gas. Then, once a month, you pay it all off. Have one or two expenses you pay with the credit card only. Do not use it as a short term loan on expenses you can’t afford, this will end up hurting you in the long run.
Every month, as you pay off this credit card, you’ll establish and build your credit. Do this the entire time you’re in college with no mistakes and you’ll leave with a strong credit score.
If you want to get started on your credit journey and are looking for some guidance, Pioneer can help with our free Credit Checkup. You'll sit down with a Pioneer team member and they'll discuss your current credit situation and help make plans on how to improve it.
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