October 9, 2017 Beth Ann Tabak See all posts in Budgeting See all posts in Life Events Creating a student budget You’re half-way through your first semester of college. By now, you’ve successfully navigated which foods are the best – and the worst – in the cafeteria; you’ve negotiated sharing space with your new roommate; and you’ve found the best shortcut to get to your 8 a.m. class ON TIME. You’re off to a great start and a successful future! Just one question: have you mastered crafting a budget? Having a budget is an important tool for financial success. Like most college students, this is the first time you are on their own, and the first time you have to think about affording things like rent and groceries. While it might seem daunting at first, making a budget is easy, and it can help prepare you for a successful future. How do I make a budget? First, make a list of all of your monthly income. This includes wages, internship or work-study stipends, financial aid, and any allowance that you parents might provide. Next, create a list of all monthly expenses. These can be broken down into three categories: Fixed: These are the expenses that do not change, such as rent, car payments or costs associated with classes. Flexible: These are expenses, such as groceries, Internet bills or phone bills, where you can control the amount of money you spend. Discretionary: These are items that, while fun, are not necessary for survival. They can include movies, dining out or sporting events. Now that you have created your lists, it’s time to see where you stand. Add up your expenses and subtract from your total monthly income. If your income is greater than your expense, then you’re in the clear! If not, then it’s time to review your spending and prioritize your expenses. Be mindful. While it’s tempting to use a credit card to buy items out of your budget’s reach, remember that you still have to pay for those items. Buying now and paying later can make it easy to get caught in a cycle of debt. Paying just the minimum monthly payment could cost you significantly due to high interest rates and finance charges. In fact, a minimum monthly payment on a $1,000 purchase could take up to 12 years to pay off! What’s more, if you default on payments, it can stay on your credit report as long as seven years. Establishing good credit is a good thing, just think before using your credit card to cover costs. For a more in-depth look at Budgeting 101, please visit: www.717cu.com/KOFE. Once you proceed to the KOFE site, select financial publications from the KOFE table drop-down menu. 7 17 has partnered with KOFE (Knowledge of Financial Education) to provide free financial education tools to help support members’ long-term financial health. Resources include publications, videos and more! Plus, you have free access to financial coaches, seven days a week!