Balancing Books and Budgets

College is a time of new experiences.

For many students, college marks the first steps away from home, the freedom to choose their own academic path, and the challenge of balancing work with academic responsibilities. It’s also the first time they’re in charge of a full-blown budget.

Education Data Initiative found the average tuition in the United States passes $25,000 per year, not to mention room, board, books and other expenses. That means students need to be thoughtful with their dollars. Mastering the art of budgeting and investing in financial literacy can make college years manageable and financially sound.

In this article we'll look into the top 5 budgeting and financial tips every college student should know. Ready to be wise about your wallet?

Budgeting basics for college students
Let’s start with the essential framework of a college budget. Start by gathering these 3 key pieces of information to help anticipate your short-term and long-term needs.

Know your income
Pinpoint all your income streams. This includes everything from part-time jobs you hold during semesters to any scholarships you've been awarded. It's also important to account for regular allowances or any financial gifts that come your way. And lastly, don’t forget about student loan disbursements that will help fund your college expenses.

Examine your expenses
Speaking of expenses—knowing where your money goes is just as important as knowing where it comes from. Keep an eye on fixed costs like tuition and rent. These are non-negotiables. Then, monitor variable expenses. The ones that fluctuate month-to-month. Think dinners out with friends, movie nights, or spontaneous shopping sprees.

Set achievable financial goals
Every successful budget is backed by solid goals. Start by setting your sights on immediate objectives, like saving up for that much-anticipated spring break trip. Then, plan for your longer-term goals—like where you want to be post-graduation. These goals will guide your financial choices throughout college.

How to create a realistic and attainable budget
Next, it’s time to set up your budget. You can use a simple piece of paper or get more technical with an Excel spreadsheet. Either way, consider these 3 helpful tips.

Start simple
The journey to an effective budget begins with simplicity. Many students find success using the 50/30/20 rule: allocate 50% of your income to needs, 30% to wants, and set aside 20% for savings. This straightforward approach makes sure your essentials are covered while still allowing room for fun and future planning.

Adjust over time
No budget should be set in stone. As you progress through college, expenses and income will change, making it important to revisit and refine your budget. Whether it's monthly or quarterly, take the time to adjust. Stay on track and handle any unexpected financial curveballs.

Check out budgeting apps
Technology is on your side. A wide range of student-friendly budgeting tools and apps are available at your fingertips. They’re designed to simplify tracking, planning and forecasting. Find an app you like to make managing finances simple and intuitive.

Saving on essential college expenses
Now, it’s time to get savvy. With college expenses rising, here are a handful of ways you can achieve the same learning goal at a fraction of the cost.

Textbooks
One of the biggest challenges students face is the cost of textbooks. Instead of purchasing brand-new, consider renting your textbooks, buying them second-hand, or tapping into the vast array of online resources available. These alternatives significantly reduce costs while still ensuring you have the necessary materials for success.

Housing
The choice of where to live during college plays a big role in your budget. Evaluate the pros and cons of staying on campus versus finding an off-campus spot. Further, consider sharing space with roommates to split costs.

Food
You have to eat. But food can get pricey. If you’re on campus, look into the value of meal plans which often offer diverse options at a bundled price. Off-campus? Try your hand at cooking—it's healthier and more economical. And wherever you are, always keep an eye out for student discounts at local eateries.

Transportation
Not all college students live on campus, so it’s important to factor transportation costs into your budget. If you have a car, you need to calculate car payments, insurance, gas and parking. The cost of university parking passes in the U.S. can easily range between $100-$500 per semester or academic year, depending on the school.

If you don’t have a car and live off campus, consider public transportation costs, such as the bus or metro. Some schools offer free bus services or monthly passes at discounted rates. Check with your school in advance to account for these expenses.

How to avoid common financial pitfalls
Watch out! College life is full of financial choices. Make one of these big mistakes and you may be paying it off for years.

Credit cards
Credit cards can help or hurt, depending on how you use them. It's important to understand the details before you start swiping. Read up on interest rates and avoid falling into the trap of making only minimum payments. Familiarize yourself with common credit card features and fees to ensure you're using them to your advantage.

Emergency funds
Life will throw curveballs, and often they come with a price tag. That's where an emergency fund steps in. Setting aside money for unexpected expenses, whether it's a sudden car repair or a medical emergency, can be the difference between staying financially stable and spiraling into debt.

Student loans
For many, student loans are a necessary part of the college experience. However, it's smart to be well-informed about the specifics — like interest rates and repayment options. Commit to only borrowing what you genuinely need (based on your budget) and make sure you understand the terms. This will help you avoid unnecessary loans and navigate repayment with less stress.

Additionally, some universities offer short-term loans throughout the course of the semester to pay off tuition through the bursar's office. These loans are typically intended to bridge funding gaps or provide emergency funds to students. Check with your school to understand the eligibility requirements for these types of loans.

Build for the future

College is a stepping stone to your future career and financial life. Make sure you’re laying down a solid foundation with these simple steps.

Financial workshops and seminars
Knowledge is power, especially when it comes to finances. Many colleges offer financial literacy events, workshops and seminars. Attend these sessions for valuable insights, tools and strategies that can help you build a secure financial future.

Networking
Your net worth can often be influenced by your network. Building connections during your college years is more than just about friendship — it can lead directly to job opportunities and financial stability once you don your graduation cap. Engage in on-campus events, join professional groups related to your field, and actively seek out mentors.

Use professional networking platforms like LinkedIn® to keep in touch and connect with colleagues, classmates and potential employers. The relationships you cultivate can be pivotal in ensuring a prosperous financial future.

Planning for post-college

During college, it’s easy to lose sight of your post-graduation life. Still, it’s important to start thinking about your full-time financial responsibilities early on.

Consider these financial decisions:

●      Setting aside money for a car or house

●      Expanding your emergency fund

●      Learning about investing

●      Opening a 401(k) with your employer

●      Paying off student loan debt

This forward-thinking approach ensures you're well-prepared to navigate the complexities of adult financial life. For more on how to navigate financial decisions post-graduation, check out this video from our team at Comerica.

Kickstart your financial journey today

Your future is bright. And you can keep it that way by laying the foundation for a prosperous financial future.

As a student, you have the unique opportunity to shape your financial narrative from an early age. Start by seeking out valuable resources, attending workshops, and prioritizing your financial education.

And remember, every successful financial story needs a trustworthy guide. Visit your local Comerica Banking Center today for advice and services to set you up for success.