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How To Budget Your Financial Aid Money In College

Aug 03, 2017 - Posted by: Rocky Mountain Credit Union

College is an exciting time. It’s the first time away from the safety net of home for many, and the sudden increase in responsibility can be daunting. Careful financial planning might be the last thing you want to worry about in the midst of all of that excitement, but a budget for that sudden influx of cash can save you from a giant headache later on. How to budget your financial aid money in college might sound complicated and boring, but it’s actually pretty simple.

Be Conservative

When you start working on your budget, remember to stay conservative in your estimates. Guessing you’ll spend $100 per week on groceries? Give yourself a little extra, budget $125. Planning on paying $500 for rent? Give yourself $700. That extra money can save you during a stressful time later on, and it’s better to end up with too much than too little.

Determine Needs And Wants

The first step is to categorize your expenses into needs and wants. Food is a need, clearly, but ice cream can go in the "wants" column. Be specific for an accurate estimate. Another thing to consider here is your priorities. If you need to cut a few dollars from somewhere, it’s best not to take it from your budget for school; maybe reconsider that party budget.

How to budget your financial aid money in college depends heavily on what your priorities are. When you’re organizing your budget, assign each category a number. It’s best to keep it simple, go from one for the least important (ahem, parties) to three or four for the most (books, rent, etc.) That way when you need something to cut it will be easy to see where you’re planning on spending the most money on the least important item.

Prepare For An Emergency

Remember when we said to be conservative when you think about how to budget your financial aid money in college? That will, if you stick to your budget, give you a nice little buffer. That money could be used in the case of an emergency, maybe cut hours or expensive auto repairs, or as a start to your life after academia. When you find your dream job, you’ll have new expenses to handle before your first paycheck, and it’s best to be able to take care of that without running up credit card debt. Speaking of that…

Stick To It

The most important part of how to budget your financial aid money in college actually comes after you create your budget. You need to stick to it. It’s ok to slip up here and there, that’s what the buffer is for, but you need to keep up with it. There are a couple of ways to do this. The number one way to stick to your college budget is to start a routine. Maybe you pay all of your bills at the beginning of the month, or you pay them when they arrive. Maybe it’s withdrawing enough cash for your groceries and going shopping once a week. Whatever it is, your routine will help you stick to your budget.

Whatever your priorities are, make sure your financial aid goes as far as it possibly can. Your future is important, and how to budget your financial aid money for college is as important to your future as your education is.

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