Budgeting & Money Management Tools for College Students

August 17, 2008

For many of us college is our first experience with managing our finances completely on our own – and it can be difficult to keep everything straight. There are several cheap and easy ways to manage your money effectively without spending a lot of time on it. Here are some tools and tactics for managing your money while you are in college:

1) Carry cash for everyday purchases – It’s a lot harder to overdraw your checking account when you carry cash. As long as you have money in your wallet or purse, you still have money. When there is no more money in your wallet, then you are broke. When you run out of money then make a withdrawal from your bank in an amount that is easy to remember. Let’s say you take exactly $50 out each time. You will never have to wonder about much of anything. You will know how much is left in your account. If you burn through $50 in the first day or two, then you will know you need to change your spending patterns.

It’s a simple rule, but one that could save you hundreds of dollars in fees to your bank. After all, you are busy working, learning, studying, socializing and generally trying to move forward with your life. If you truly don’t have time to sit down and balance your checkbook each day, then carrying a set amount of cash will keep you from accidentally overdrawing your bank account.

2) Use your bank’s online service to keep track of your accounts – This is usually a free service that comes with your checking account. Make sure you check it every few days to make sure that your records and the bank’s records agree. Be aware that most banks run several days behind when they post your charges – so don’t be tempted to think that you have “extra money” in there somehow. It’s more likely your bank has not posted your last few transactions.

3) Invest in a cheap folder or grab an envelope and keep your receipts in it – This is a habit that will serve you well the rest of your life. It’s very, very common to blow your budget on the little items, not the big ones. Buying three sodas or coffees a day, eating lunch out, etc. can really add up. If you save your receipts then you can sit down at the end of the month and go through them. They will give you a very clear picture of where your money went that month. Reviewing those receipts will also help you to understand what your spending habits are, and teach you to change the expensive or unhealthy habits to better ones.

When you’re ready to move up….

Let’s say you’ve got the basics down, and you’d like to take a more hands-on approach to your money, possibly open up an investing account, keep track of your student loans, manage your credit cards, and make a detailed budget

There are all sorts of personal finance tools out there that can do the job, but many of them are expensive. In my opinion there are two programs out there that outshine the rest. If you put them both together, you have a powerful tool to help you not only manage your complete financial profile, but every detail of your schedule as well.

1) You Need A Budget: The YNAB software will allow you to spend less time managing your finances than ever before. There are three versions of the software that range from $11.95 to $39.99. (Compare that to the cost of a program like Quickbooks that starts at $100 for the basic package).

YNAB let’s you import your transactions directly into the software from you bank – you don’t have to spend time each week updating your financial software to match what your bank account already says. It allows you to make your own categories for things, track anything you want to, and even contains the tax forms you will need to fill out at the end of the year.

With YNAB you can track your spending and debt repayment over time, set goals, and do just about anything you can imagine to design your own budget. It is by far the cheapest, most sophisticated piece of financial software I have seen to date. And it will grow with you – once you are out of college you can use YNAB to keep track of your mortgage, car payments, even retirement accounts.

You can learn more about YNAB by clicking here.

2) BackpackIt – This is an online service that runs about $7 a month. It has a calendar feature that you can set up with the due dates for all of your bills and BackpackIt will email you a reminder the day before they are due (or any day you set it to remind you.) You can use it for your school projects and relatives birthday’s too.

A few additional features:

You can access BackpackIt from anywhere, and create individual private pages for anything you need. You can make pages for your school projects, your financial goals, or anything at all. You do not need to know html to do any of this, everything is drag and drop.

BackpackIt has a To-do list feature, and a “Make a Note” feature. You can also upload files, and email things to the program and they will appear on your pages.

BackpackIt has really become invaluable to me personally – I wish I had it in college. You can keep track of your entire life with it and it’s completely private and easy to use. If you’re curious about it, you can get a free trial of BackpackIt here.

If you were to combine YNAB and BackpackIt I honestly believe you would never need another piece of financial software ever again – they are that powerful a combination. Together they are tools to manage your finances, your projects and your life quickly and seamlessly.

Whether you choose to use either of these programs or not, be sure that you do set up a system for managing your money. As tough as things are to manage while you are in school, they actually get even harder once you’re finished. If you get your basics down now, and have software you can trust, then maybe you will never have to struggle with managing your finances – and that is priceless.

In this series you can also read about a review of student health insurance options and comparing them with eHealthInsurance.  Find the best spot to keep your hard earned money in our review of the best checking accounts for college students.  Check in tomorrow when we’ll discuss the best student credit cards.

This review of software for budgeting and money management for college students is part of the College Student Money Guide.


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10 Responses to Budgeting & Money Management Tools for College Students

  • Rosemary

    Budget Planning and implementing those plans are important for any student. Students usually take loans, they have to spend for entire studies with some plans. Great information on money management.

  • money management

    A very informative post…
    Another post which depicts the essence of money management,I recently visited at http://www.manageme7.com/blog/money-management/manage-your-personal-finance-the-soccer-way

  • Connie Brooks

    @ ToughMoneyLove thanks for your comment! Thanks also for the tips on the free email reminder programs, I am going to check them out. I probably should have been a lot more specific about Backpack. It’s a whole lot more than an email reminder system.

    You can actually email things to the program and have them show up on your pages. You can also make to-do lists, notes, keep track of links and contacts, etc. I ditched my Daytimer for it and I have never looked back since.

    I often work from multiple computers, so the ability to store a file on Backpack and access from anywhere has made my life much simpler.

  • ToughMoneyLove

    Good suggestions except for the one about spending $7 monthly to have reminders sent to you about paying bills. There are lots of free sites that will do that (Mint, Billster, and Buxfer are three that come to mind). Many banks have online billpay services that will also do that. Save your money for other stuff.


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