College Budgeting Tips
where to begin
Students and parents should work together to setup a budgeting
plan for college to avoid "running out of money". We invite you to use these quick budgeting tips:
(you can download these steps as a 1-page trifold)
Budgeting Steps:
Download the School Budgeting Worksheet
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Budget Your Financial Aid for the Academic Year Open file: college-budget.xls
Enter available financial aid amounts for:
This is important information to know when you manage your budget throughout the year.
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Estimate
How Much You Can Spend Each Month
Now budget the expected costs for the academic year. Your college is required to send you costs upon acceptance of your application. Make a best estimate on what you expect to spend for:
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Check the Financing Gap Open file: college-budget.xls
This area shows any financing gap that you may have by subtracting the cost of education from total financial aid. If it shows a negative number, you need to 1 of 2 things:
You need to generate a positive cash position for the academic year.
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Manage Your Budget Open file: college-budget.xls
Move to the tab "School Year 1" The worksheet has allocated your aid and expense budget by month. Your net cash position at the start of your academic year should be positive and equal to your total financial aid (since no money has been spent).
Now move down to Cell: A49 This section shows your budgeted costs allocated by month and by category. This is how much money you have to spend for each category during the academic year. As you start school, you will enter the total money spent under each month for each category.
For example, let's say your tuition bill for the year was $5,000 and paid in full in September. You will enter $5,000 in the "yellow" input cell under September for the category: Tuition and Fees (Cell: G55). Since you budgeted $5,000 for tuition, the net annual spend position should be $0 (Cell D57). This means that your annual spend equals your budgeted expense. Any additional spend for tuition will put you in a negative spend position.
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Record Your Expenses Open file: college-budget.xls
We have suggestions on how to manage and record your daily spend:
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Watch Your Net Spend Position You need to watch the "your annual net spend position" for each category. It must remain at $0 or more. Anything less than $0 puts you in a negative cash position (based on your budget). Unless you find additional aid or reduce other expenses, you will run out of money before your academic year is over.
Since most federal aid programs and scholarships are fixed, you are not likely going to find any additional aid from these sources. Likewise, most tuition, room and board, books and fees are fixed expenses. You won't be able to reduce these expenses. You will need to look at "variable" financial aid resources and "variable" expense items to bring your cash position back to positive:
You can increase aid by:
You may decrease some of your variable expenses such as food, entertainment, transportation or other
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What if You Run Short You can borrow up to the cost of education each academic year. |
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