Tips to Budget Your Financial Aid
Congratulations on receiving your financial aid package! A significant amount of money has now been deposited in your bank account, so you may be wondering, now what? The next step is to budget how the money will be used.
1. List all your expenses
Writing a list of all your possible expenses can seem like a daunting task, so start with your absolute necessities as a student. Feel free to use pen and paper or open an Excel document. In the left-most column, you’ll probably be writing down: tuition, ancillary fees, textbooks, other study materials, rent, utilities, Internet, groceries, transportation, clothing. Next, list your wants. Maybe a smartphone upgrade? Maybe a “fun” section for eating out, movies, games? List the non-essential items by order of your personal priority. Note that financial aid is typically given semester by semester, so focus on the expenses for that specific semester.
2. Divide up your financial aid
The next step is to divide up your financial aid into amounts for each of the expenses above. Again, start with your absolute necessities. How much are your tuition and ancillary fees? How much are your study materials, like textbooks and graphing calculators? How much is your rent, utilities, Internet? How much will groceries and transportation cost? Since you’re budgeting financial aid for one semester, for monthly costs like rent and groceries, indicate the amount for the all the months in that semester.
Add up all the necessary expenses. Subtract that total from the total amount of financial aid you have received. How much do you have left? You have two major outcomes.
- If this number is zero or a negative number, you have to either reduce or eliminate some of your essential expenses, apply for more financial aid, or start looking for a part-time job or work-study arrangement. Rent, for example, tends to be a significant expense, so maybe consider living at home or living with roommates to eliminate or reduce this number.
If this number is greater than zero, start dividing this number amongst all your non-essential expenses. Be realistic with your assigned costs. If you find that the remaining money is not enough to cover all your wants, eliminate or reduce some. For example, if you have your eye on the latest iPhone but your current phone is perfectly fine, wait until your contract allows you a free upgrade
3. Get input from family and friends
Now you have a rough draft of your budget, ask your family and friends to take a look and give you feedback. They know you and your situation best, so they are best prepared to advise you. Maybe you put down $100 in total for your transportation costs, but that is just not realistic for your situation.
Now that you have completed your budget, the most important thing to do is to stick to it! As each week and month pass by in your semester, you may find that you need to revise your budget. That is okay! Just make sure you at least have enough to cover all your essential expenses for the rest of the semester.