Sophomore Gabby Harris said she knew the stress of running out of money too well.
Due to her failure to stick to her budget, she now had to skip out on outings with friends and attempt to get through the next few weeks without spending much money. Many college students make a plan for when and where to spend money. Those that fail to make this plan may find themselves in situations like Harris’s.
Dan Spore, personal finance professor and financial adviser, said it is very important for students to have a budget, whether it’s dividing up money their parents give them or keeping track of how much money they will make from their job.
“Its up to the student to allocate that money on a periodic basis, which is essentially what a budget is, to make sure that the money lasts,” Spore said.
Spore suggests dividing income into semesterly, monthly, weekly or even daily allowances. For example, if a student gets $500 per semester, they can divide this into $100 a month, Spore said. He said the type of budget depends on the student’s personal preferences.
Every month, sophomore Kayla Werner budgets $625 for her rent and $25 for electric. She then breaks down her grocery budget into $50 per week.
“Budgeting is important so I can try and save some money for fun things like trips,” Werner said.
Werner said she only goes out to eat if she did not spend all of her grocery budget for the week.
Going out to eat and spending time with her friends is more of a priority for Harris. She said she typically goes out to eat around two times a week. This can sometimes make it hard to stick to a budget, she said.
“I think I can just do it on my own, but the time comes to it and I think ‘Oh, it’s just $5, it’s not a big deal,’ but it adds up,” Harris said.
When she spends her money quickly, Harris said she becomes stressed. She has to worry about how often she will have to work to raise the amount of money in her bank account.
This is a struggle she believes many students face, she said.
In addition to sticking to a budget, Spore said he always suggests students save money in an emergency fund. This money could come in handy if a student’s car breaks down or their pet needs to be taken to the vet, he said.
“That way you’re not faced with constantly having to put stuff on a credit card,” Spore said.
Credit cards can be an asset in situations like these but they can also be dangerous, Spore said. Before students decide to use a credit card, they should decide whether they want to use it as a bank from which they borrow and end up paying off 30 years later or as a convenience to which they charge things but pay off later in the month.
Werner said her advice to students is to start saving money early, like in an emergency fund, and to try to purchase cheaper items at the store. This allows students to save money for fun things, like going out to eat, she said.
When Harris’s funds are low, she suggests she and her friends cook dinner instead of going out. Just last week, she had already gone out for dinner twice when her friend asked her to go out again. Instead, she suggested they eat at home.
Spore, Werner and Harris said they believe setting good habits now will make the process easier when students have more expenses after they graduate.
“It’s a good practice because it’s really preparing you for the day you’re out in the real world and you have a house payment, car payments, food, insurance and all that stuff you have to buy,” Spore said.
Harris said she hopes she will have better luck sticking to her budget with practice.
“Hopefully over time I’ll get better and realize I need to start saving my money,” Harris said.