College Students Can Profit Right Away by Making a Budget
September 1st, 2010 
Carol 
September is College Savings Month, a great time for those who are already in college to start developing healthier financial habits. The need is very real: after years of dutifully saving for college, more and more college students are spending their school years piling credit card debt on top of their student loans, leaving them in a deep financial hole upon graduation. This cycle can also lead to stress, depression and decreased academic performance while still in college.
Fixing the problem cannot wait for a student’s entry into the “real world.” College students need a budget plan, money tracking capabilities and access to basic money, credit and debt management information.
“Considering that more students drop out of school because of financial difficulties than academic problems, gaining these basic life skills is right up there in importance with gaining an education itself,” says Jo Bittof, co-founder of Solutions Financial, a financial management consultancy.
According to Ms. Bittof, the earlier one begins the budgeting process, the better – another reason for getting started during September’s College Savings Month. “Just as it is unwise to enter into marriage, a loan contract for a car, or any other financial situation ignorant of one’s ability to handle the obligation, entering college on a fiscal wing and a prayer is a potential set up for failure,” she explains.
Fortunately, budgeting is an easy two-step process:
1. Gather as much realistic information as possible regarding what expenses will occur. Consider tuition, books, living costs such as rent, utilities, transportation including fuel, food including groceries and eating out, entertainment, clothing, school supplies and so forth.
2. Next, list all sources of income and include how the money will flow in. For example, money from a summer job is temporary and cannot be looked at as monthly income. It is best to use summer earnings to purchase one-time or periodic needs such as clothing, while looking to monthly sources of income to see how it stacks up against monthly outflow.
When establishing their budget, students should take advantage of training resources to create the best budget. Free online tracking and training systems – such as those from Solutions Financial’s website, ActFinancially.com – provide step-by-step tools to help students create a budget, track income and expenses and have readily available reporting mechanisms to help stay on course.
Budgeting rapidly becomes profitable because the student:
• Knows where their money will be spent, rather than falling prey to mindless spending. Most never realize that the $3 a day for coffee before class and the $4.50 a day to grab a quick lunch between classes can add up to $565 a semester, or more.
• Knows where their money is coming from, is aware of potential discrepancies and shortfalls upfront…and can therefore address and resolve them before they turn into credit card debt.
• Gains a foundation of knowledge about personal financial management, putting them several steps ahead of their peers.
Just as sound financial planning should play a big part in saving for college, it is just as important for navigating the college years themselves. It’s never too early to develop a healthy financial lifestyle.
ActFinancially.com is owned by Solutions Financial, LLC. This online resource is a robust, user-friendly financial tracker surrounded and supported by educational materials, coaching, a support community and a personal rewards program. Founded by Jo Bittof and Nancy Gehring Lowery, ActFinancially.com crystallizes their combined 60-plus years of experience in the financial management, banking and credit disciplines across a broad range of industries. The mission: to help people better understand and manage their money, to achieve a truly healthy financial lifestyle with the ultimate goal of reaching total financial freedom.
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