College marks a significant transition period for many young adults — it’s a time of newfound freedom and the financial responsibilities that come with it.
Whether your funds come from family, student loans, scholarships or your own wallet, you’ll need to budget for expenses like textbooks, housing and, yes, a social life. Knowing who’s footing the bill, what costs to expect and which ones you can live without — ideally before school starts — can reduce stress and help you form healthy financial habits for the future.
Before you build a budget, go over some important details with the people — parents, guardians or a partner — who will be involved in financing your education. Discussing your situation together will ensure everyone is in the loop and understands expectations.
“One of the biggest obstacles we have [with] teaching young people financial literacy and financial skills is not making money and expenses a taboo subject,” says Catie Hogan, founder of Hogan Financial Planning LLC. “Open lines of communication are far and away the most important tool, just so everyone’s on the same page as far as what things are going to cost and how everybody can keep some money in their pocket.”
Here are some topics to start with:
To determine what you’ll spend each term, keep these college-related expenses on your radar:
» MORE: How to manage money in your 20s
The basic principles of budgeting, like living below your means, still apply regardless of the source of your funds. Whether you’re working or receiving help from your parents or financial aid — or all of the above — figure out how much money flows in and out.
You don’t have to go through a grueling process, like filling out a spreadsheet every day; you’ll have enough homework. Just set aside some time at least once a month to review your money situation. Budgeting apps and online banking can help make the process more manageable.
“Just knowing that you can log into your online banking and take inventory of what you have and the income coming in, I think that’s more than enough,” Hogan says.
Start with the common culprits: food and fun. “Looking at what is the least expensive meal plan you can get without going hungry is a big money-saving tip,” Hogan says. “And a lot of campus activities and groups and all that [are] really great, but they can weigh really heavy on your budget, so don’t overcommit.”
If you’ve managed to stay afloat as a student, you’re in good shape. Continue on a financially healthy path by thinking about life after graduation. If you’re working and able to build a cushion, set financial goals, like creating an emergency fund or saving for a trip — and don’t forget about any student loans you might have to pay off after graduation.
“You obviously don’t want to burden yourself so much that you have anxiety about it while you’re in college, but I think having a healthy grasp of reality … is helpful in terms of knowing what kind of lifestyle you can really afford to live in college,” says Kyle Moore, a certified financial planner in St. Paul, Minnesota.
The article Budgeting for College Students: Where to Start originally appeared on NerdWallet.