August means back to school, or off to school for some who are leaving home for the first time to attend college. Moving away from home is a big step in all aspects of your life—social, personal, emotional, and financial.
For most young adults, it’s the first time they’ve become financially independent, and the first time they’ve had to manage a budget and learn how to keep track of personal expenses, student loans, tuition, housing costs, and more.
Because at The Money Manual, we understand the importance of creating a student budget, talking about money with your parents or guardians before you leave, and tracking expenses each month.
Here is our budget challenge for every college student in America!
Before You Leave Home
1. Create a plan
Know who is paying for college and whether you’ll need to get a job, rely on financial aid, have help from family, or a combination of all of these.
2. List expenses
List out expenses you can expect like tuition, books and other expenses such as transportation or school supplies. Estimate the cost of these and determine who is covering what (your parents or you).
3. Set up your credit cards and bank accounts
If you are under 21 you’ll most likely need a co-signer for a credit card. If you’re setting up a checking account, be sure to find one with low or zero fees. Check out Chime banking for 100% fee-free online banking. Opening an account takes less than five minutes and you will get a checking account, savings account and debit card all for free.
Not only is Chime going to save you a ton on fees, another huge bonus of banking with Chime is that it allows you to get your paycheck two days early! When you are down to your last few dollars at the end of the month, that is a massive benefit!
After You Leave Home
1. Track your expenses
Know how much you’re spending each month on food, clothes, transportation and other expenses. Budget and manage your expenses so you don’t go into debt.
2. Set up an emergency fund
If you’re working and can, set up a savings account for emergencies. Keep in mind any student loans that you have that you will need to pay off after graduation. If saving is a struggle for you, let Digit help. Sign-up today and they will automatically move money to your savings account based on your spending habits throughout the month.
3. Understand your student loans
Make sure to understand the exact amount of student loan debt you acquire and make a plan for how you will pay it back.
4. Shop around for textbooks
Textbooks are one of the largest expenses of the semester, averaging out to nearly $1,200 a year for most students. Shop online, buy used books and check Amazon and eBay to see what deals you can find. Resell your books at the end of the semester to make some cash back. For other school supplies, earn cash back by purchasing online through Ebates, or in store with cash back apps like Ibotta.
Commit to the challenge to budget and stay on top of all of your finances today, next year and throughout all of your years in college! You’ll be that much more ahead of the curve when you graduate.
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