Budgeting Part 2: Student Loan Edition

When you have a steady income (or any income at all), it’s a little easier to make a budget. Basically, you make sure that “money going out” is never more than “money coming in”, and that all your bills are paid. But what about when you get paid only once?

For many students, the lump-sum student loan is their only real source of income for an entire semester. Somehow, these students need to make sure that this money last them for months at a time, while still paying for essentials like rent and food. While it’s difficult to do, it’s entirely possible (just damn near impossible) to do this.

1) Pay off ALL the school things

That money is for your education. Before you drop a dime on anything else, make sure your education is paid up. That means paying your tuition, buying (or renting) your textbooks, paying for any incidental fees (meal plan, residence fees for on-campus living, health plans, etc)…… ANYTHING that would impact your ability to go to classes and then stay in school until your degree/diploma is done. Some schools won’t let you register for the next semester until all your fees are paid up.

And, before you ask, yes you will need textbooks. You can’t (for the most part) just copy down notes from class and learn from there. Depending on your school, you could have a lot of options. Some schools have a used bookstore, or let you rent books. Others keep a copy of every textbook in the library.  Make sure you know all of your options and make a real, possible to follow, plan of action for your semester (ie., don’t just think you can photocopy other people’s books).

2) Now for monthly expenses

Make sure you have money for all those bills you need to pay off every month. Add up your monthly bills, then multiply that number by the number of months your loan has to last you. THAT number is how much you need to set aside, at the very least, to get you paid off each and every month.

3) Divide up what’s left 

Any and all money you have left after taking out the monthly expenses….. THAT is what you have to work with for the rest of the semester.  This is your groceries, your coffees, your shopping, your emergency money, your going out money. So how do you manage this?

With math!

Take the money, and just divide it. You could divide it by the number of months it has to last, or the number of weeks. Hell, divide it by the number of days you need it to last, if you really want to go that far. No matter how you work it, just divide it up and stick with that number. So you get $350 a month? Then that’s it, that’s all you get for each entire month.

Now, divide that number up however you want. Do you want just a set number you can spend each week? Then divide by the number of weeks in the month, and there you go! Another great idea is to divide your money up by what you need it for. Figure out what you’ll need/want to spend money on (food, clothing, going out, emergency fund, etc). Then, figure out how much you need for each of these things. You can always reassess your needs each month and adjust things if you need to (say, you realize you need more than $15 a week for groceries, or you can’t spend $0 on entertainment and not feel like you’re going crazy).

4) DON’T GO OVER BUDGET!!!!

Every time you go over budget this month, that’s less money you have every month for the rest of the term! If you have no other source of income, then you have to steal from your future self to pay off your present self. Want to overspend on this month’s clothing budget? Then it comes out of your clothing budget for next month. Same goes for groceries, entertainment, and every other little thing you spend money on.

Remember, it’s always better to under spend than over spend. If you have extra money left over at the end of the month, you don’t have to run out and spend it right away. Add it to next month’s budget. Stick it in your piggy bank (you’re never too old for a piggy bank). Save it for the end of the semester, to use to blow off some steam after exams. It’s always better to have that little extra left to save for later, than to be scrambling to get by on $75 for your whole last month because you kept over spending.

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