By Andrew T. Gardener, CFP®

College is a time of freedom, growth, and learning — and not just in the classroom. It also comes with more financial responsibility than many students have faced before. Even if you never take an accounting or financial planning course, it’s essential to understand the basics of budgeting and long-term financial planning. Here’s how to manage your money wisely now, budget and build financial habits that will serve you well after graduation.

Start With a Realistic Budget

The foundation of good financial habits starts with a budget. A budget doesn’t need to be complicated — it just needs to reflect reality.

Before the college school year starts, identify your expected income. Start by listing all sources of income, including:

• • Your savings
  • Contributions from your parents or guardians
  • 529 education-savings accounts
  • Student loans, grants or scholarships
  • A part-time job or student work-study

Before you get to school, list your expected expenses for the year. Divide expenses into fixed and variable categories:

• • Fixed: Tuition and fees, housing, car payments, meal plan, phone/internet bill
  • Variable: Food, transportation, books, school supplies, entertainment, clothes, extracurricular activities, taxes

Manage Your Cash Flow Wisely

You’ll notice that some income and expenses occur in small, regular increments, while others come in larger lump sums. Your food costs outside of a meal plan may be a daily expense whereas college tuition is typically paid once per semester.

Receiving a big disbursement from student loans or family support at the beginning of the semester can make it feel like you have a lot of money to cover those costs — but that money must last. Here’s how to budget and manage student cash flow smartly:

• • Divide large deposits by the number of weeks they need to cover. If you get $5,000 for a semester that lasts five months, limit your monthly spending to $1,000.
  • Avoid unnecessary debt. Try to use a credit card for convenience only so that you don’t have to carry a lot of cash around. If you don’t have enough money in your account to pay off the full balance when it is due, only use it for emergencies. Hint: Lattes and concerts don’t count as emergencies.

Maximize Campus Resources

Why spend money when your college campus already has much of what you need?

• • Use the campus gym instead of paying for a private one.
  • Take advantage of student meal plans. Even if it’s not gourmet, eating on campus is usually cheaper and potentially healthier than restaurants.
  • Visit the student health center for basic medical and mental health services.
  • Explore free events for entertainment — guest lectures, concerts, movie nights and club activities.
  • Tap into academic support services such as tutoring, writing centers and libraries instead of paying for outside help.

Plan for Life After College Now

While it might seem far off, the earlier you plan for life after college, the better.

• • Understand your student loans. Know how much you owe, your interest rates and your repayment options. Tools such as StudentAid.gov can help you project your payments and plan accordingly.
  • Build your credit. Consider a student credit card or become an authorized user on a parent’s account. Remember to pay off your balance each month.
  • Start an emergency fund. You’ll want to be prepared when unexpected costs pop up after college graduation.
  • Open a Roth IRA. If you’re earning income from part-time work, consider opening a Roth IRA — it’s never too early to start investing for your future. Even small contributions can grow significantly over time.

Don’t forget that your financial future also depends on your earning potential. Focus on doing well in your classes, building your network and developing marketable skills.

While college is just a chapter in life, the financial habits you develop now can influence the whole story. If you’re unsure where to start — or just want some expert guidance — a CERTIFIED FINANCIAL PLANNER® professional can help you build a budget, understand your student loans and plan for your long-term goals. Don’t hesitate to ask for help; getting personalized advice today can set you up for a more secure tomorrow.