The Importance of Budgeting Your Financial Aid
Many students use financial aid, such as StudentAid BC or OSAP, to help pay for all or part of their education at trade school, college, or university. While it can seem great to get a lump sum of money at the beginning of the school year or semester, it is important that you know where that money needs to go.
Creating a budget is essential, so that you know how to spend your financial aid to be sure that all your expenses are covered, and you won’t run short of money before the end of the year, or at a crucial moment.
Know Your Expenses Ahead of Time
Before you can create your budget, you will need to know all the expenses you’ll have to pay for. This is an important step, and chances are you will have collected a lot of this information when you prepared your student loan applications.
Make a list of everything you need to pay for school, including tuition fees, student fees, rent payments or residence fees, textbooks and course materials. Once you have that, list other non-school (but still essential) costs you will have to cover, such as car payments and gas, transit passes, groceries, cable/phone/Internet service, medical expenses not covered by your insurance, and any other unavoidable living expenses.
Don’t forget to include a list of your estimated entertainment costs, or decide on your allotment of entertainment money to use for things like going out with friends or treating yourself to clothes or gadgets.
Know Your Total Financial Aid
Once you know what all your expenses will be, the next step is to list out all the financial resources you have that you can use for school. This includes your student financial aid, but also any grants, bursaries, and scholarships you’ve received, as well as your personal savings, summer or part time job earnings, and any money your family is able to contribute.
Even though some of these numbers might be estimates (for example, if you’re not sure exactly what family can contribute or how much you will be able to save from a summer job), make your best guess as to what the final totals will be, so that you will at least have a fairly close final total.
Build Your Budget and Payment Schedule
Once you know how much money you will need versus how much you have available, it’s time to create your budget for the semester or school year. This includes knowing the dates that all your payments are due, and whether they will be paid automatically from your bank account, or if you need to make the payment yourself online, over the phone, or in person. It can be a good idea to write your important payment dates on a calendar, or set reminders in your phone, so be sure that you don’t miss any payments.
Some expenses, usually tuition and residence fees, can occasionally be paid directly by the student financial aid program, rather than requiring you to manually make the payment. However, this isn’t always the case, so be sure to check with your school and get all the necessary information on payment methods.
Once you know your payment schedule and weekly or monthly budget totals, determine the order in which you need to make payments, according to priority as well as the date. For example, school expenses, living expenses etc. are fixed and non-negotiable, so you should ensure these will be paid first.
If you find, after working through the budget, that you will fall short in terms of money, then you will have to make some adjustments to cut costs in the variable or optional costs, such as getting Netflix instead of cable, lowering the amount of smartphone data on your plan, or cutting back on your allotted entertainment funds.
As long as you plan ahead, set your budget, and stick to it, your financial aid will cover all your expenses, making for one less thing to worry about as your progress through your education!