By Reyna Gobel
You just received your financial aid award letters from the financial aid offices of the colleges you are considering attending, and you're approved for enough student loans that you won't have to get a part-time job. But don't plan your study/party schedule until you've accounted for all possible expenses and verified that your future loan payments won't be too burdensome as you begin life after college.
In this section, you will construct a budget. taking into account all sources of income and your expenses (from tuition to entertainment), and learn how to set limits for student loan borrowing based on your career choices. (Learn everything you need to know about budgeting in our special feature, Budgeting 101 .)
Constructing a College Budget
The first task in constructing a college budget is to make sure you're ready to construct a realistic budget you can stick to while you are in college. This isn't just a matter of including all possible categories of spending. You need to be honest with yourself about the amount you will spend in each category.
For example, let's say you decide you only need $100 a month for groceries. In theory, you could eat ramen noodles and macaroni and cheese every day, and
then splurge with the occasional fast-food hamburger. Skipping the health factors involved in the above diet, would you actually stick to this minimalistic meal plan? (For more tips of shopping cheap, see 22 Ways To Fight Rising Food Prices .)
Sit down with a close friend who is already in college and/or your family to list all possible expenses and set realistic amounts for each category.
Print the table below and fill in the numbers you estimate for your monthly costs in the first column. Next, request a phone or in-person consultation with a financial aid officer or money management staff member from each of the universities you are considering. Put the new numbers in the university estimate column.
Print a budget for each university you call. If you know someone attending that university, put their numbers into the next column. A great way to get realistic budget numbers for a particular university is to ask the student staff in the money management office or financial aid office what their students spend on a monthly basis. Finally, compare the numbers you've gathered with your original budget in order to create a revised budget column. (For more information on budgeting read The Beauty of Budgeting .)
First Semester of School Estimated Budget