Student Budgeting Success: Managing Finances During College

For many college students, managing finances can feel like an overwhelming task. Between juggling classes, working part-time (or even full-time), and trying to enjoy the college experience, the added responsibility of managing your finances might seem daunting. Here, we'll walk you through a few budgeting strategies to ensure you set yourself up for long-term financial success during college and beyond.

Maximize Financial Aid

When filling out your Free Application for Federal Student Aid (FAFSA), it is essential to keep these tips in mind; they will make your financial aid package work for you—not the other way around:

• File forms as early as possible: The federal government sets aside $150 billion yearly for grants, loans, and work-study awards, which are awarded on a first-come-first-serve basis. The earlier you file, the more likely you will get the most funding.
• Accurately report income: Many students and families mistakenly overstate their incomes by reporting gross income instead of adjusted income (which accounts for deductions like health insurance). Do not inflate your income; this could negatively impact your financial aid package.
• Minimize student assets: When paying for college, parents are only expected to use roughly 5.6% of their assets; students are expected to use 20% of their assets. This means that even if someone gifts you money for college, it can lead to receiving less financial aid. To maximize financial assistance, parents should keep this money in their names—not give it to you or open a savings account in yours.
• Complete a FAFSA application, regardless of income: Do you think your family makes too much money for you to qualify for funding and scholarships? Apply anyway. Many factors go into determining college funding. For example, if you have a sibling who will be in college simultaneously, it can radically increase your chances of receiving financial aid. The size of your family is another factor that impacts eligibility. Always apply (and reapply) for financial aid and assistance.

Create a Budget

Creating (and sticking to) a budget is critical for a college student. Here’s how to do it:

• Track your income: Document all the money you earn monthly, whether from a part-time job, gift money, or financial aid.
• Track expenses: Next, write down all your fixed and variable expenses. Unlike variable expenses, fixed expenses do not change from month to month.
• Categorize expenses: Now, group your expenses into categories like housing, food, and transportation. This will tell you exactly where your money goes every month.
• Compare your income and expenses: Finally, subtract your total expenses from your total income. If you have money left over, set it aside for savings. If your expenses exceed your income, it may be time to cut back on your spending.

Keeping up with a budgeting plan takes discipline—one reason we recommend using budgeting apps available through many banks or other platforms like Mint.

Get Help From a Financial Expert: We’re Here to Help

Many college students mistakenly believe they do not have enough assets to require working with an accountant. This couldn't be further from the truth.

At STG Accounting, we offer a range of services specifically tailored to help families and college students navigate the complex world of personal finance. Whether you need to create a budget, seek guidance on maximizing your financial aid eligibility, or want advice on tax planning and debt management, our experienced accountants are here to help. Contact us today!