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    6 Steps to Building a College Budget

    Your starter kit for managing your money.

    Josh Johnson

    Quickly after I arrived at college, I realized that if I was going to make it, I needed a budget—and so will you. Whether you have a car and a healthy stash of cash, or are more like my college-student sister ("I have $8 to my name," Bri told me the other day), there will always be more enticing spending opportunities than resources available. Always.

    As much as any factor, having a budget in place will make or break your college experience—just like it will make or break your bank account.

    OK, budgets are a must. Enough said about that. So let's get real practical with six easy-to-follow steps.

    Step 1: List it out


    A budget must always begin with a pair of lists. On one side of a piece of paper, write down all the sources of income you think you'll tap into while at college: money from a part-time job, a set amount you get from your parents, graduation gift money, change you anticipate spotting along the sidewalks, etc.

    Now, on the other side, write down all of the expenses you will likely encounter. Unfortunately, this list is WAY longer. It should include things like your tithe to a local church, cell phone bill, groceries, car payments and gas, insurance, books, loan payments, medical expenses, miscellaneous school fees, entertainment, gifts for friends, and eating out, as well as money set aside for an emergency. You might want to ask your parents or a college-aged sibling for help making this list. After all, what better way to impress them than by showing how responsible you can be? (And who knows, maybe they'll trust you with more money!)

    Have what you think is a comprehensive list? Now put a dollar figure next to each item, estimating how much you plan to spend over the course of a semester (or month, if you'd rather break it down on a smaller scale). As you think through these expenses, keep in mind how your expenses will be impacted by special events, such as going to Mexico for spring break, or unexpected events, such as when the parking monitor catches you pulling your car into the spot reserved for the school's president (I knew I shouldn't have done that).

    Step 2: Set your priorities


    Let me guess: Your column of expenses totaled more than your expected income, at least on the first try. Happens to all of us.

    Step two is where the process gets painful, as we're forced to separate the "really wanted" from the "really important." This is where priorities and sacrifice enter the picture. You must determine what uses of your money: a) are necessary to pay off your commitments, and b) will really make you happy and help you in the long run.

    Your commitments are the bills you have yet to pay. These must be paid off. Then, you've got to use the money you have left as wisely as possible to do things you'll enjoy. For example, I had a college buddy who poured a significant amount of money into food. He kept the mini-fridge in his room stocked with his personal favorites, and he kept the local pizza deliveryman in business. He was doing something he enjoyed. But when it came time to go on a spring break trip with some friends, he found himself short on funds. He realized the trip was more important to him than some late-night pizza, but it was too late. He hadn't been wise, and now he had no money.

    On the other hand, my friend Kim went on a summer mission trip to Northern Ireland. During the entire second semester before her trip, Kim didn't spend a dime on a pizza, a movie, or even a cup of coffee. She still managed to have fun despite her sacrifice, and her efforts paid off. Her trip was a defining moment in her life. Thanks to the money she saved, she had the funds to pay for her trip and cash to spend while she was there. She wouldn't have been able to pull this off if she hadn't made the trip a priority and adjusted her budget to compensate.

    The moral of the story? Determine what's truly important to you—then budget to make it happen.

    Step 3: Sweat the small stuff


    Budgeting is an exercise in sweating the small stuff, and this is particularly important for a college student.

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