Budgeting for College: What to Expect

Whether you're going into your first, fourth, or last semester of college, you're going to need a budget. A budget helps you determine what you can afford to spend each month, and it can help make college a much more pleasurable experience--at least financially.

Pre-Budget

Before you can create a budget, you need to have a few known factors going in. First, you need to know how much money in scholarships you will receive. Here are some scholarships to consider:

• Tuition scholarships - for those who had a great GPA and testing score before college; free tuition is affordable tuition
• Study-specific scholarships - free money for your particular major, minor, or hobbies
• Demographic scholarships - if you're a minority in your major, you may be eligible for a scholarship; for example, women who study engineering are usually eligible for scholarship
• Performance-based scholarships - if you're smart and get good grades while in school, you may be eligible for these
• External scholarships - these scholarships you have to apply for outside of your college; usually you have to write an essay and get a recommendation, but these can be very rewarding for the amount of effort required

You should also ALWAYS fill out the FAFSA. The FAFSA is the Free Application for Federal Student Aid. At the minimum, the government will offer you loans with good terms. However, you may be eligible for a pell grant. Pell grants are small amounts of money that the government will give you to pursue your first bachelor's degree. You don't have to pay them back. Think of this like a "Thank-you" from the government for collecting your future taxes.

Ask your parents if they are able to contribute to your education. Many parents have saved for their children's college expenses. If your parents offer to help, don't be too proud to accept it. This income is the difference between making and breaking it for many higher-income households. If your parents are unable to contribute, you still have plenty of options.

Budgeting

I recommend doing this AFTER you get results from your FAFSA. If no deadlines will pass, it would be wise to wait to make your budget until you know the results on all your scholarships.

This is the time to clear your head, remove any dreams you may have, and be realistic. You probably will need your help estimating all your costs. A great tool to use is the Wells Fargo College Budget. It has all categories that you need to worry about taken care of. Whatever costs you anticipate, always assume you will spend a few dollars more per month. That way, if you ever do spend what you anticipate, you'll still be under budget.
*NOTE* If you don't know what your college expenses may be, your college should have it advertised under their financial aid section. Make sure to find a "price calculator" and use these numbers. They tend to be somewhat accurate.

Calculate your total expenses on the worksheet. Then, calculate your total GUARANTEED income. If you're not sure that you'll receive a scholarship or grant, don't use it as your income.

Subtract your guaranteed income by your expenses. If that number is negative, you will need to take out loans for that amount or get a job to cover that expense. If you have never been to college, I recommend taking out the loan and trying out the job to see if a job is right for you. Some people can balance a job with college, whereas others can't. Never take on something that you can't handle! However, if the result of your previous calculation was positive, then there is a good chance that your budget is healthy.


Good luck budgeting for school. If you have any more questions, please comment with them below!