Creating a College Budget Template for Your New Grad
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If you have a child heading to school this fall, chances are the task of creating a college budget isn’t at the top of your priority list. If so, it’s perfectly understandable. After all, you’ve probably been so focused on funding your child’s college savings plan, helping them apply for financial aid and scholarships, and making all the necessary preparations for the big move that you haven’t had time to think about much else.
But before your fledgling flies the coop, it’s important that you sit down together and have a serious talk about money. Whether your kid is naturally thrifty or blissfully clueless when it comes to finances, this is likely the first time they’ll have to manage money on their own. Now’s the perfect time to create a budget that will help both you and your child navigate the next few years.
How to Create a College Budget Template
Although you can always create your own college student budget, there’s really no need to build one from scratch when there are plenty of free college budget templates already available online. Take some time to research what’s out there and compare your options so you can find a template that both you and your child feel comfortable working with.
Once you’ve settled on a template, start listing out all potential income sources and expenses. If you’re not sure where to start, here are some common entries for each category:
- Student loans
- Financial aid
- Money from parents
- Part-time income
- Room and board
- Textbooks and other supplies (e.g. a laptop and printer)
- Cell phone/internet
- Dorm furnishings
- Transportation and/or car payments and insurance
- Meal plans
- Entertainment and personal expenses
Once you’ve completed your list, have a conversation with your child about which expenses you’ll be responsible for and which ones you’d like them to take on. For example, you may agree to pay for your child’s tuition, fees, and room and board, while they agree to pay for textbooks, meals, and personal expenses.
The breakdown of who pays for what is up to you. “There are huge advantages to both helping pay for a student’s education and letting college students fend for themselves,” says personal finance freelance writer Alexa Mason, writing for The College Investor. “This decision doesn’t have to be “either/or”. It can be “and” – meaning that you can help pay for some college (maybe a set amount each year), and the student pays the rest. There’s no one size fits all here.”
Once you’ve completed your college budget template, give yourself and your offspring some time to adjust to the new normal. It may take a few weeks or months to get used to sharing this responsibility.
How to Cut Back on Expenses
After the adjustment period, it’s time to check in on your budget to see what’s working and what’s not. For a college budget to be successful, it needs to be relatively balanced at the end of each month or semester. If you’re continually ending up in the red, you and your child will need to make some changes.
As with any budget, the easiest way to do this is to cut down on expenses.
There are many ways your student can cut back on spending. Some popular options include buying used textbooks, making the most of student discounts, ride-sharing with other students when traveling, selling items that are no longer needed, cancelling unused or unnecessary memberships, and cutting back on restaurants and takeout meals.
It’s also a good idea to encourage your student—and yourself—to keep credit card use to a minimum. The last thing your child needs is to start incurring debt before they’ve even joined the workforce. (If your student has taken out loans to pay for college, that’s already plenty of student loan debt they’ll have to deal with after graduation.)
How to Bring in Extra Income
If cutting back on expenses isn’t enough to get that college budget on track, it may be time for your child to find a part-time job. Ideally, this will be something your kid can do to supplement their income that won’t demand too much of their time or interfere with their studies.
If your child has filled out the FAFSA (Free Application for Federal Student Aid) form, they may qualify for federal work-study, a program that provides part-time, on-campus work to full-time students.
They can also check with their school’s student-employment office to find out what’s available. “Paid jobs may be available at the student newspaper, cafeterias, bookstores, the maintenance department, even the school mail room,” says Ashley Kornee, freelance writer and frequent contributor to college-planning website College Raptor. “Talented students may be able to work in the school’s library, computer labs, or learning centers to help other students.”
If on-campus work isn’t an option, there are plenty of part-time, off-campus jobs available to students looking to earn a little extra cash. Some popular part-time jobs for students include dog walking, tutoring, babysitting, bartending, driving for Uber or Lyft, serving as a barista, hotel clerking, or even working part-time as a fitness instructor.
Why Budgeting Pays Off
Creating and sticking to a budget is seldom anyone’s idea of fun, even under the most favorable circumstances. And when it’s one you need to maintain in tandem with a child who may be attending college halfway across the country, it’s practically a guarantee that you’ll encounter some frustrating scenarios (did you know college students spend 5.5 billion on alcohol alone each year? Ouch.).
However, the benefits are hard to deny. Not only will a college budget help you and your child manage the various expenses that come with a college education, it will also help them build decision-making skills that they can take into the real world after they graduate.
Managing money, making sacrifices when needed, and bringing in extra cash when cost-cutting efforts fall short are all essential skills that your kid will benefit from learning now rather than later. With your help, they’ll be building skills that can last a lifetime.