The Student’s Guide to Spending Plans

When you’re in college, every penny counts. That’s why the stereotypical student eats ramen noodles, has roommates, buys only used furniture and is always on the lookout for free or cheap ways to have fun. We get it—college life is all about squeezing the most out of your precious time and resources. That doesn’t mean your finances need to be as messy as your housemate’s room or as stressful as a 20-page term paper.

Whether you are an eager freshman or seasoned upperclassman, we have some tips to help you get your student finances in order.

Create a spending plan

The most important part of getting your finances in order is creating a plan. Instead of aimlessly spending your money and wondering why you’re out of cash mid-month, follow these simple steps:

1. Calculate income. Determine your total income for the month, including any money you earn from part-time jobs, allowances, scholarships or other sources.
2. Track expenses. Start by tracking all your expenses for at least a month. Use a notebook, budgeting app or spreadsheet to jot down every purchase and payment you make. Some expenses will be fixed, like rent and utilities, while others will vary, such as food, gas and entertainment.
3. Calculate savings. The amount left after deducting expenses from income is your savings. It’s also your safety net, softening the impact of unexpected costs.
4. Determine your priorities. What things are important to you? Food and housing are likely at the top of your list, but you have wiggle room with other priorities, such as friend time and entertainment. Try to keep these extra priorities to a minimum so you don’t overspend.
5. Set goals. Are you saving for a specific item, building an emergency fund, paying off debts or planning for future expenses like travel or tuition? These goals will help guide your actions. Don’t forget to prioritize them!
6. Use the 50/30/20 rule. A good rule of thumb is to utilize 50% of your income for your needs, 30% for your wants and 20% for your savings.
7. Put your plan in motion. Once you have your budget, priorities and goals assembled, it’s time to take your plan for a spin. Give it at least a few months to see how well it works, and don’t be afraid to make adjustments as you go.

Stay on track

Improving your financial situation as a college student requires discipline, planning and making informed choices. Here are six tips to help you stay the course:

1. Limit unnecessary expenses. Cut back on non-essential expenses, such as impulse buys and non-priority purchases. Remember, you can still have fun if it fits within your plan—just don't get carried away.
2. Take advantage of student discounts. Many businesses offer student discounts on various products and services, so remember to cash-in on these opportunities.
3. Cook at home. Eating out regularly can cut through your budget like a hot knife. Prepare meals at home instead and feast on the savings.
4. Be careful with credit cards. Be cautious with credit card usage and pay off credit card balances in full each month to avoid interest charges. Otherwise, you could be in for a shock.
5. Work part-time. Consider finding a part-time job, side hustle or freelance work that fits with your schedule to earn additional income.
6. Prioritize saving. Aim to save a portion of your income regularly, even if it's a small amount, to build an emergency fund and plan for future expenses.
7. Use an app. There are dozens of free apps to help you manage your finances. Read the reviews and find one that meets your needs.

Talk to an expert Creating a spending plan and sticking to a budget isn’t something you need to do on your own. The financial guides at Mountain America Credit Union are always here to lend an ear and offer a helping hand. Schedule a free appointment today.