Step Two – Budget Planning!
As you move to make one of the biggest financial decisions of your life, you need to put together a realistic budget. Your budget should be a living document, constantly being updated and improved. First, you need to get a clear view of what is going in, what is coming out, and what is left over (if anything). Put it on paper, type up an excel spreadsheet, or whatever method works best for you.
Tip for Tracking Expenses – If you do online banking, all of your statements should be viewable online. Go back through month to month to get an idea of what you have been spending.
*Try free online services available, such as Mint.com, that will help you track your month to month spending.
What to Include in Expenses:
- Housing costs (rent, mortgage, etc.)
- Household bills (electric, cable, water, internet, phone)
- Transportation (car payment, bus passes, gas, routine car maintenance)
- Food (grocery shopping, restaurants, colleges may offer meal plans)
- Leisure activities and hobbies
- Clothing (include laundry or dry cleaning costs)
- Any other expenses that have regularly appeared over the past few months. You should expect that they will continue unless you decide to make a lifestyle change.
- College Tuition *
- Books *
- Fees (Activity Fees, Lab Fees)*
*See Net Price Calculators in Step Four
Calculate Incoming Funds:
- Income from Working
- Contributions from Third Parties (Family, Veteran’s Benefits, Employer Reimbursement)
- Scholarships and Grants
- Student Loans if needed
If your current budget shows that more money is needed for expenses than you have coming in, then you may want to be open to making some changes.
- Pick up a part-time job
- Consider alternate transportation options such as public transportation or carpooling
- Consider alternate housing options such as getting a roommate or living off campus with a relative
- Evaluate your spending with a need versus want breakdown
In order for college to be affordable, your incoming funds have to exceed your expenses.