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Studying is time-consuming and draining. The last thing you want is anxiety about money.

But don’t let your desire for a 4.0 fool you into thinking you can “just worry about the money later.” Between the cost of tuition and lost wages while you’re in school, earning your degree is a costly endeavor. You certainly don’t want to add to the price of your education by overspending or taking on credit card debt.

By planning your finances at the beginning of each term, you can look forward to a more successful semester or quarter and ultimately graduate a little bit less broke.

In this article, we help you determine the right timeframe for a college budget and evaluate your income sources. You’ll get a handle on fixed expenses and discretionary spending, determine your budget and use two types of bank accounts to keep your spending in line. We also give you tips on pacing yourself, avoiding the credit card trap, getting an emergency fund and saving.

Identify your income sources

Typically, people budget by the year or by the month. With back-to-school finances, you’re better off budgeting by the semester — say from September 1 to January 1 — or by the trimester or quarter.

When your budget parallels your school schedule — whether it’s semesters, trimesters or quarters — it’s easier to stay on track. That’s especially true when student loans are involved. If you’re using your student loans for living expenses, you’ll get a lump-sum payout at the beginning of the semester. Obviously, you’ll need to budget that money so it doesn’t run out.

Using student loan proceeds for living expenses is sometimes a necessity. But keep in mind that it will increase the debt you graduate with, and you’ll pay thousands more in interest. On the upside, you might be able to work less and spend more time studying. Make your choice carefully. If you have extra student loan money, it might be best to pay it back toward your loan.

Perhaps you’re paying for college out of loans, savings and gifts as opposed to income you work for while going to school. Regardless of the source, you’ll want to stretch your money as far as possible. As you spend, you’ll start paying interest on loan proceeds you use and/or draw down your savings faster.

If work is part of your income, you definitely want your money to last. Certain side jobs can help you make a little extra without committing to something full or part time.

If you’re forced to work more than expected to cover your costs, you’ll miss valuable study time. That’s where a good budget comes in — and assessing your expenses is an important part of it.

List your expenses

Although it’s far from being the only factor, paying for tuition is your primary concern. Is everything paid up front from loans or scholarships? Or are you on a monthly payment plan? Typically, you either pay one big bill at the beginning of the semester or quarter, or you pay every month.

After you account for tuition, the rest of your college budget will be based on your remaining expenses, including food, transportation, housing, other living expenses and so on.

And don’t forget those ancillary fees. That includes textbooks — a huge factor — and other things not included in tuition like lab fees. For large college expenses like textbooks, it helps to plan ahead to calculate what your total costs might be and start looking for savings as soon as possible.

Planning for your textbook purchases? Barnes & Noble sells only the highest-quality used books at low prices, so you can stretch your budget. Some used textbooks are listed at 90 percent off their sticker price! Learn more here.

Your “nut”: fixed expenses

At Money Under 30, we encourage you to get a handle on all your fixed expenses. We call that total your “nut.” For a college or grad school budget, your fixed amount would include your tuition, rent, utility bills, debt payments, insurance, any savings and so on. Those you absolutely must pay every month, every quarter or every year.

Take your fixed expenses out of the money that comes in. Whatever’s left is money for discretionary spending. That’s what you’ll be working with when you make spending decisions.

Easy-to-miss expenses

Certain budget items can take you by surprise because they’re bigger bills that don’t come once a month. For example, you might pay car insurance every six months, or maybe you have travel expenses at the beginning and end of every semester or quarter.

Be sure to avoid drawing down your lump sum without noting that your car insurance is due in December or that you’ll need a plane ticket. You can even prepare for things like Christmas gifts by putting that money into a special account for later.

What about health insurance? Maybe you’re getting through school or your parents’ policy. If you’re paying for it yourself, don’t miss that when you’re budgeting.

Establish your budget

When you earn a regular paycheck every week or two, it’s often easiest to budget by the month. After all, that’s how often you pay most bills, and it’s easy enough to predict how much money you’ll have left every 30 days.

But everything’s different when you’re in school. You may need to pay for some of your largest expenses, like tuition and textbooks, all at once. Likewise, you could be living on student loan or scholarship proceeds that are disbursed in a lump sum at the beginning of the semester.

Let’s say that in your bank account you have student loan and scholarship proceeds, plus some earnings you deposit occasionally. Perhaps every semester costs an all-inclusive $15,000 for you to pay for living expenses, tuition and everything else. So each semester, $15,000 goes into an account along with whatever you were able to earn.

But you’ll need another account for your spending money.

Two separate bank accounts

The biggest and most useful take-away you’ll find here has to do with where you keep your money: We strongly recommend that you open a separate bank account for money you’re able to spend throughout the semester or during the month. Give yourself a paycheck every month or every two weeks. If you deplete that amount, stop spending until your next scheduled “payday.”

You have a specific amount of money for a semester, trimester or quarter. Some of that money is spoken for, because you need it for fixed expenses like tuition, textbooks and housing. You’ll leave that money in your main bank account, which is different from the account you use for money you spend on everything else on a monthly basis.

With this account setup, determine your semester budget by answering the question, “What will everything cost from now until January 1?”

A prioritized spending plan

If you’ve got a big tuition bill at the beginning of your semester or quarter, you’ll pay that first from your main account. You’ll base your spending ability on what’s left over. After that, you’ll factor in your other fixed expenses, followed by discretionary spending.

Write down you total costs and divide that by the months you’ll be in school for the semester or trimester. You’ll arrive at a specific amount you can spend per month. If you’re on quarters, assign the whole amount to the quarter.

If you’re not on quarters, at the beginning of every month, you can transfer your smaller month-by-month amount into the account you have for spending. Your limit is set and you can stick to your college budget by spending only what’s in that account each month. If you’re on quarters, transfer your entire spending amount and limit your spending to that quarter.

Though you’ll break up your semester’s funds by the month, it’s helpful to keep the big picture in mind. Put a sticky note on your laptop or bathroom mirror showing the funds you have for the semester and what’s left.

You need to see the amount going down and know how you’re doing in reference to your goal. You can update your reminder once a week.

Your success with a college budget isn’t about the timeframe you choose. It’s about the discipline of monitoring the amount of money you have available to spend until the semester or quarter is over.

Remind yourself that you have a specific amount and that’s it. It’s just like a business budget. Even if there’s more money floating around in that savings account, you must pretend it doesn’t exist. Thinking, “If I spend a little more in December, then I’ll just transfer more,” means you’ll tap into next semester and fall behind. The next thing you know, you’ll start down the road to credit card debt. 

Avoid the credit card trap

Resist the temptation to pay for textbooks with credit cards. For me, it was the gateway drug for using a credit card for other things.

It’s easy to convince yourself that, since school loans are an investment in your future, borrowing money on a credit card to pay for textbooks is no different. Not true! Credit card interest rates are much higher. Interest starts accruing immediately, whereas subsidized federal student loans give you a long grace period.

Let’s look at that slippery slope.

You’re a college freshman. You’re on semesters, so you put $500 in textbook fees on a credit card with 20 percent interest the first semester and every semester that follows. That’s $500 for eight semesters for a total balance of $4,000. Each month, you pay only the minimum amount due on that card until you get out of college. When you graduate four years later, you’ll have already paid over $2,000 in interest! Worse yet, you’ll still owe the credit card company more than $3,600!

Read more: How to use credit cards responsibly

Get an emergency fund, college style

Even college students need some kind of emergency fund to fall back on. Here are some solutions if you don’t have an emergency fund yet:

Bank account buffer™

Keep $500 or $1,000 extra in your checking account. Don’t spend it except for dire emergencies. If you don’t feel comfortable doing that, you can also keep the same amount in a savings account that’s linked to your checking account in the same bank. That gives you easy access if something unexpected happens.

A backup credit card

You don’t want to get into debt when you’re still in school. Other than your existing student loans, it’s best not to be digging deeper. However, if you don’t have a bank account buffer™, a credit card could be very useful if your car breaks down or that truly unexpected event occurs. As long as you only use your credit card for emergencies, you’re fine.

When it comes to saving money on purchases, at Money Under 30 we always advise that you look for savings on your most significant expenses. Instead of focusing on cutting out the occasional pizza, identify your biggest expenses for the semester or quarter. For example, you’ll examine tuition, housing and maybe transportation.

Buy used textbooks

Textbooks, which are obviously a big expense, belong in that category. I remember over 10 years ago that textbooks easily cost $500 a semester and sometimes more. You can save up to 90 percent off the sticker price of some used textbooks by shopping at Barnes & Noble whenever you can.

Consider textbook rentals

You can also look into renting textbooks for the semester. Barnes & Noble has thousands of textbooks available with flexible rental periods up to 130 days. You have the option to extend or purchase your book anytime during your rental period. Plus, Barnes & Noble offers free return shipping on all rentals! Learn more here.

Sell your textbooks back

Finally, don’t forget to recoup some of your textbook budget by selling your used textbooks back when you’re done with them. For example, you can sell your books back to Barnes & Noble for cash. They’ll provide you with a prepaid label so you can send the books back to us without shipping fees. Learn more here.

Keep an eye on your student loans

When looking to save on big-ticket items, remember that all student loans are not created equal. Federal loans are standardized, but if you’re taking out a private loan, it pays to shop around. Your school might recommend some lenders, but they have zero competition and can charge whatever rate they want. So investigate other lenders by doing some shopping online for student loan rates.

Summary

Now that you’re ready to set up a practical college budget, here’s a quick summary of key points to remember.

First, know how much money you have for the semester between student loans, scholarships, income and savings.

Next, subtract from that total your big, one-time expenses like tuition, textbooks, housing, insurance and so on.

Take what’s left and divide by the number of months in your semester. At the start of each month, transfer that amount to another account you’ll use for spending.

Following this method can give you the peace of mind to succeed this semester along with the confidence that your budget won’t fail you either!