Prepare an estimate college budget.
Consider what costs you will need to cover while in school. Keep in mind that your income may vary from month to month, and not all of your expenses will be the same each month. Larger expenses (such as car insurance and books) and seasonal expenses (such as a trip home at the holidays or a higher electricity bill in summer when the air conditioning is on) need to be incorporated into your budget.
- First, estimate how much money you will have coming in each month.
- Next, identify your expenses, and group them into two categories—fixed expenses and variable expenses.
- Include a “Savings” item as a fixed expense – this will be emergency fund to help with unexpected expenses, or single future expense like a trip to visit family.
- Find balance. Look at your sources of income and expenses, compare them to balance your budget. Subtract your expenses from your income – the result is your “balance.” A positive balance means you’re earning more money than you’re spending. A negative balance means you are spending more money than you have, your budget exceeds your income.
To balance your budget, you may need to monitor your variable expenses, reduce your expenses, and/or find ways to increase your income. Spending less can be a lot easier than earning more.