How to Get Started with Budgeting as a College Student

Key Takeaways:

• Budgeting helps you control your spending and achieve financial goals.

• Track your income, categorize expenses, and set realistic spending limits.

• Start small, be flexible, and adjust as needed to stay on track.

• Qwik cards make budgeting simple and help you build credit at the same time.

When it comes to managing your finances, creating a budget is the first step toward financial freedom. As a college student, you may have different financial priorities and challenges than someone further along in their career. But establishing good financial habits now will set you up for success long after graduation, and make college life a bit easier. This post will walk you through the basics of budgeting and how to create a plan that works for you.

What is Budgeting and Why Should College Students Care?

Budgeting is the process of tracking your income and expenses to ensure that you are living within your means and making progress toward your financial goals. Whether you're paying for textbooks, groceries, or weekend activities, budgeting helps you balance spending with saving, so you don’t end up broke before the month is over.

As a college student, having a budget is crucial. With so many expenses to juggle, like tuition, rent, food, and entertainment, your financial situation may feel tight. A budget helps you take control of your money and avoid the stress of living paycheck to paycheck.

How to Create a Simple Budget

1. Track Your Income

The first step in budgeting is knowing how much money you have coming in. This could include money from a part-time job, an internship, or allowances from family. Be realistic about your income and only factor in guaranteed sources, like regular job earnings or scholarships, rather than anticipated or uncertain sources.

2. List Your Expenses

Once you know your income, the next step is to list your expenses. Think about all the monthly costs you need to cover. These might include:

• Fixed expenses: Tuition, rent, phone bills, utilities, and subscriptions.

• Variable expenses: Groceries, transportation, dining out, social activities, etc.

A good rule of thumb is to break your expenses into needs and wants. Needs are essential, like rent or textbooks, while wants are discretionary, like dining out or entertainment. Remember that these may look different for everyone! A gym membership might be a need if you’re a regular weightlifter, a want if you’re looking to get started, or a bit of both. Acknowledge the fuzzy lines, but try to fit these into one of the two categories.

3. Set Spending Limits 

After categorizing your expenses, it’s time to allocate your income to each category. Here’s a basic structure to consider:

• 50% for needs (housing, transportation, food, etc.)

• 30% for wants (entertainment, social activities, eating out)

• 20% for savings and debt repayment (emergency fund, student loans)

You can adjust these percentages based on your specific financial goals, but this 50/30/20 rule is a great starting point for most college students.

4. Track Your Spending 

Setting budgets is only half the work! The key to successful budgeting is tracking your spending regularly, and being honest with yourself whether you’re sticking to your budgets or not. You can do this in-app with Qwik, or you can look into apps like Mint, YNAB (You Need a Budget), or even a simple spreadsheet to log your expenses. Keeping track of your spending helps you stay within your limits and avoid overspending on discretionary items. 

At the end of the month, reflect on your spending and see if you can make any changes!

5. Adjust Your Budget as Needed

Life is unpredictable, and sometimes your budget will need adjustments. If you find that you're consistently overspending on food or entertainment, consider scaling back in those areas or adjusting your needs-to-wants ratio. Flexibility is crucial, and adjusting your budget will keep you on track for achieving your goals.

Tips & Tricks: Budgeting for College Students

• Start Small: Don’t expect perfection right away. Budgeting is a skill that takes time to develop, so start with simple categories and build from there. Don’t give up if you forget to fill in your spreadsheet one week!

• Use Cash for Discretionary Spending: To avoid overspending, try using cash for things like dining out or shopping. This helps you visually see where your money is going and stay within limits.

• Look for Student Discounts: Many businesses offer discounts for students. From textbooks to clothing, take advantage of student deals to keep costs down. Stack discounts where you can, and take advantage of Qwik’s cashback offers to save on top of the student discounts.

• Set Goals: Whether it's saving for a trip or paying down credit card debt, having clear financial goals will keep you motivated to stick to your budget.

Why Budgeting is Essential for Building Credit

A solid budget isn’t just good for tracking expenses, it also sets the foundation for building your credit score. When you stick to your budget and pay your bills on time, you demonstrate responsibility, which helps improve your credit score over time. Plus, budgeting helps you avoid getting into debt or missing payments, which could damage your credit.

Get Started with a Qwik Card

If you're looking for an easy way to manage your finances while you build your credit, Qwik cards are a perfect solution. With pre-set spending limits and cashback rewards, Qwik makes it easy for students to budget effectively without worrying about overspending. You’ll build credit, manage your money, and enjoy exclusive perks – all while sticking to your budget.