Personal Budget Guide
Many students experience financial concerns while attending college, and like 41% of Americans, they likely do not use a budget. Having a budget can help you save money, reduce financial emergencies, and monitor expenses. Learning how to create and maintain a personal budget in college will also set you up for financial success later in life.
Criminal justice students in particular may experience financial challenges since they are often required to complete internships, which are unpaid or which pay little.
Criminal justice students in particular may experience financial challenges since they are often required to complete internships, which are unpaid or which pay little. Additionally, criminal justice students and professionals often work long hours, which can leave little time for budgeting and other healthy financial habits. Still, establishing a budget is critical for all students and non-students alike.
This guide includes budgeting terminology and resources, as well as information about tracking your spending, maintaining your budget, and cutting your costs in college. Finally, the guide offers several additional resources for criminal justice students on a budget.
Track Your Spending
1. Assess Current Financial Spending
The first step to tracking your spending is assessing your current financial situation. Start by looking up recent bank or credit union statements. Then, make a list of all of your fixed and variable monthly expenses.
2. Categorize Expenses
While assessing your spending, categorize expenses according to whether they are essentials or nonessentials. Your essentials list should include fixed expenses like rent, mortgage, insurance, tuition, and student loan repayments, as well as necessary variable expenses like utilities and groceries. Be sure to include education-related expenses such as books and printing costs on your essentials list.
3. Do the Math
After assessing and categorizing your expenses, add up the items on the essentials list. Subtract this number from your monthly income. The resulting number is your monthly discretionary income.
4. Create your Budget
The discretionary income you calculated is the amount of money you can spend on extra, nonessential items each month. If your calculations resulted in a negative number, you are most likely spending more than you earn each month. This problem is particularly common among students who rely on student loans. In order to decrease spending, consider ways to cut your essential costs. For example, you might choose to rent, borrow, or buy used school books rather than buy new ones. You might also choose a cheaper phone plan or commit to carpooling to school. The “Tips for Cutting Costs” section below offers more information on reducing your monthly spending.
Experts typically recommend a 50/20/30 rule. According to this rule, designate 50% of your budget for essentials, 20% for savings, and 30% for nonessentials. Keep in mind that while the 50/20/30 rule is a useful framework, these percentages will vary each month. Many students may struggle to stick to these proportions exactly, especially when it comes to saving 20% of their income each month. You may need to adjust the rule and save only 10% or less per month while in school.
Maintaining Your Budget
Maintaining your budget is as important as creating one. Regularly reviewing and updating your finances will help you avoid spending blindly and impulsively, which can result in accumulating more student and credit card debt or overdrafting your checking accounts. Luckily, several apps are available for easy budget tracking; see our “Budgeting Tools” section below for more information about these resources.
Many experts recommend you spend a few minutes reviewing your spending each day, even if it’s just a quick glance at your checking account. Additionally, update your budget once a month or whenever you experience significant financial changes. Students may want to update their budgets at the beginning of each term to account for class, financial aid, or tuition changes.
- Left to Spend This app helps you keep track of discretionary income. Users can set up a daily budget for nonessential personal expenses and log each expense. The app automatically calculates how much of your discretionary income you have left.
- Microsoft Excel Spreadsheets such as Google Sheets or Microsoft Excel are classic methods for budget organizing. With spreadsheets, you can log your income and expenses in order to gain a clear picture of your budget. You can create several columns or individual sheets to organize nonessentials, essentials, savings, and other financial categories. The Balance offers several free spreadsheet templates for budgeting.
- Mint Mint organizes your bills and expenses in one place. Not only does the app help you create a budget, but it also sends you credit card payment and bill alerts, as well as generates a free credit score. The app is designed for smartphones so you can easily access your budget from anywhere.
- Personal Capital Personal Capital helps you establish long-term investment goals and financial plans. This tool links all of your financial accounts and displays their information on one dashboard. It also calculates your net worth and sets a personalized budget with categories for different expenses.
- Simple.com This bank is completely mobile; through the website or an app, you can set up a checking account and budget and make payments. Simple also helps you establish and set aside money for specific goals related to school, travel, and other expenses.
- Wally Available for iPhones and Androids, Wally calculates your discretionary income and provides a clear picture of where your money goes each month. It also helps you log and organize the details of where, when, and how you spend money.
- YNAB YNAB is software designed to set, maintain, and update budgets. It focuses on helping you set spending categories, plan for long-term expenses such as tuition and insurance payments, and avoid impulsive spending. The software also prepares you to manage occasional overspending or unexpected expenses.
Tips for Cutting Costs in College
Adopt Healthy Spending Habits
Prepare Meals at Home
Use Student Discounts
Find Cheap Textbooks
- StudentLoans.gov Part of the U.S. Department of Education, this website is home to FAFSA, the free application for student financial aid. Other resources include budgeting tips for students and detailed information about student loans.
- Indeed.com This job search website is an excellent resource when it comes to generating extra income and finding jobs after graduating. The website allows you to search and apply for paid internships, as well as part-time and full-time work related to criminal justice.
- Consumer Financial Protection Bureau The CFPB is affiliated with the U.S. Department of Education. This website’s financial aid shopping sheet allows students to compare financial aid offers. Online financial guides offer advice regarding student banking and loans.
- LifeHacker This website’s list of student discounts includes tips for finding cheap books, school supplies, clothing, and furniture. It also recommends businesses and organizations such as Amazon, Geico, and Verizon that offer significant student rates.
- WayUp This job search website is designed specifically for students, helping them launch careers by finding internships and entry-level positions.
- NerdWallet NerdWallet’s user-friendly website offers several articles and lists related to student budgeting and healthy financial habits. The website also offers a free budget calculator.