College students aren’t known for having a lot of money on hand, but that’s precisely why it’s even more important that they budget their finances.

 

"Setting clear financial goals provides direction and helps students make the most of their money during college and beyond," said Mengya Wang, OSU Extension personal finance specialist.

 

Classic examples of college goals include paying for enrollment costs, saving for a car or simply planning for a trip home between semesters. Long-term or short, those targets require plans to balance against daily expenses.

 

The first step is to look closely at income and expenses as well as credit use and any reserve accounts where funds are set aside for quarterly, semiannual and annual expenses such as insurance.

 

"Understanding where your money is coming from and where it’s going is the first step in creating a realistic budget that supports both short-term needs and long-term financial success," Wang said.

 

Write down all sources of income and all expenses, consider the plan’s feasibility, then finalize it and put it into action. 

 

"It’s important to track income and spending, make adjustments as needed, and keep long-term objectives in mind to stay financially stable throughout school," Wang said.

 

One unique consideration for college students may be the order in which they spend financial aid.

 

Students should spend “free money” such as grants and scholarships first before using funds earned or saved through jobs or the federal work study program. Finally, they should use money gained through loans.

 

"Students should prioritize using grants and scholarships first, followed by money earned through jobs or work-study programs, and then loans as a last resort,
 Wang said. "This strategy helps minimize debt and makes repayment more manageable after graduation."

 

For more information about money management, contact the nearest county Extension office and visit the Family and Consumer Sciences website.

 

OSU Extension fact sheets are available as well: The Financial Puzzle: Goals, Choices and Plans (T-4316) and The Financial Puzzle: Putting the Pieces Together (T-4149).