For those of us who have the privilege to receive scholarships, either academic or athletic, we often don’t pay enough attention to the money that we are actually receiving. When it comes to finances it seems like a foreign language for most of us. In order to get the most out of our hard earned scholarships, it’s important we understand basic financial information to help us manage our money. This not only helps us while we are in school, but also prepares us for our professional careers.
During my first few years of college, I found myself stashing money in my checking account and swiping my debit card on things I really didn’t need, such as shoes, weekly trips to restaurants, and other miscellaneous purchases. As I look back, I could have easily had several more dollars saved in my account over the past four years. I had no one to tell me that until my senior year. Now it’s your time to be educated about putting some money away so you can enjoy it when you get out of college. Between Pell Grants and scholarship money, you could have more money coming out of college than you had going in, which will better prepare you for the next step in your life.
Budgeting is knowing your income and subtracting your expenses. Because you receive monthly checks it makes the math really simple. For example, let’s say your expenses are rent, food, and gas in your car. Rent is $700 a month, food is likely $60 (if you’re not eating at the café) and gas is usually $100 a month. Most of us receive between $1,200 and $1,500 a month. By doing the math and subtracting your rent, food, and gas from $1,200 you have roughly $340 remaining. By taking the time to do this math, you are starting a budget. The next step is putting money aside for yourself. That means instead of going to buy the newest shoes, setting up a savings account to keep some money for a rainy day, or years down the road when you need to finance a new car or even a house.
Beware of the Dangers
The difficult part is when you put this money into your savings account. You have to think of it as non-existent, which means you don’t just pull this money out when you feel like it. Because all of your expenses are taken care of every month, realistically the only reason you should take this money out is for emergencies or major purchases in the future. Write out your purchases and break them up into different categories. The more you understand about money and where your money is truly going, the more you will have for later! Twenty years from now you don’t want to regret not having any money in the bank, but a house full of things. Those “things” do get old, but money can last you a lifetime if you manage it wisely.