Step one: Figure out what you have
List all of your financial resources, including grant and scholarship money, savings, family assistance, and any other income.
Step two: Figure out what you need
In addition to tuition, fees, books and supplies, you need to estimate how much it will cost to live on while attending school. Food, transportation, utilities, housing, and other costs are included and should be listed individually. Be realistic about your expenses and don’t forget to include entertainment.
Step three: Compare your lists
Compare what you have with what you need. If you have more money available than you’ll need, congratulations! You can start saving up for an emergency or a treat like a new laptop. If you need more than you have, don’t worry. There are a few options.
Option 1: Decrease your expenses
If you have listed all probable
expenses, it is likely you can see a few areas where you can cut back. Consider whether you really need that season ski pass or newest fashion items every month. Cut nonessentials where you can.
If you aren’t quite sure where you can cut back, try online banking tools (available with most banks) to track your spending over time and see where your money is going. You may be surprised by the results.
Option 2: Increase your resources
There are a few ways to do this. First of all, make sure to apply for all grants and scholarships, from the federal government, your state, your school and private organizations. Second, consider a part-time job. Working no more than 20 hours per week eases your finances, and is often also beneficial to your studies by keeping you focused and giving you a sense of responsibility.
If these options don’t cover all of your costs, you can take out student loans. Student loans have much lower interest rates than emergency credit options like credit cards – and they can be a resource to make sure you have the resources up front to cover your expenses. This is why it is so important to be realistic about your spending habits and expenses when you develop your budget.
The federal government and the State of Alaska offer a number of student loan options worth evaluating. Check out our other videos for more detailed information on loans.