So you've accepted your offer of admission and you'll be starting your first university term this fall!
Take your downtime in the summer as an opportunity to prepare yourself a student-friendly budget. Selecting courses and determining your class schedule is a top priority, but it's also important not to let your finances fall through the cracks.
Planning your budget ahead of time will ensure a smooth transition into the school year so that you can be on top of your game.
Here are some helpful step-by-step tips:
1. Income
Collect all of your sources of income on a monthly basis and calculate the total. These include scholarships, bursaries, awards, student loans, lines of credit, and earnings from employment.
2. Expenses
Record a list of your monthly expenses and break them down into two categories in a spreadsheet: Fixed and Variable.
- Determine what's fixed; that is, consistent every month. Examples: rent, utilities, insurance.
- Determine what's variable; that is, expenses that are optional, or likely to change somewhat in any given month. Examples: entertainment, eating out, groceries, clothing, etc.
3. Spend less
Make sure that your income outweighs your expenses. If it doesn't, you'll need to adjust your spending or cut where possible. Cutting down on "variable" costs is usually the place to start. Reducing or removing optional expenses like concert tix or a new wardrobe, or cutting out your daily coffee shop run, can make a big difference over time.
4. Savings
Avoid the temptation of spending all your leftover money after covering your living costs. Anticipate the possibility of urgent expenses! Some of your disposable income should be reserved for unexpected but necessary costs, such as replacing a lost transit pass, laptop repairs, etc.
The more money you can save now, the better. Money in a savings account grows over time, and as a student, you have plenty of years ahead of you to grow your savings!
5. Credit
Credit cards should be restricted to emergencies — not impulse buys — and shouldn't be conflated with your regular income. If you do need to incur a balance on your account, opt for the lowest interest card you can find, and be sure to make regular payments to maintain a good credit score.
Lots of banks offer student-friendly credit cards, so do some digging if you need one. Again, it's better to use your credit card sparingly, and pay any debts promptly. Credit card debt is a scary reality for too many people.
6. Food
Don't let food eat up your budget! It's easy to lose track of how much you spend on lunches, "break" foods such as coffees, snacks and takeout meals. They may seem like small expenses, but they can add up quickly. Give yourself a reasonable budget so these expenses become treats rather than habit, and take the time to meal prep.
For more tips on budgeting, check out these helpful resources:
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