By The Honorable John C. Ninfo II

            Concerned about college expenses?

            There are a series of steps that you and your parents can follow in developing a realistic college budget based on reasonable and necessary expenses. You can win the game of making it through college without spending any more than you really need to and avoid going into unnecessary debt.

A budget is simply the comparison of all of your expenses to the funds you have available to pay for those expenses. If your expenses exceed your available funds and you want to stay out of debt, your only choice is to balance your budget by either increasing your available funds or decreasing your expenses.

            How do you create a balanced budget?

1. Start now by carefully observing and recording your spending. Keep a journal and write down everything you spend your money on.
2. Take a realistic look at your habits, interests, lifestyle and activities. Then determine whether you will continue, discontinue or add some things when you go to college. Do you have an expensive hobby? If you are an avid golfer now and will that continue? Do you have enough clothes so you don’t have to do laundry that often? Do you have health issues that require prescription ot over-the-counter medicines?
3. Ask yourself: What does my family pay for now that I will have to pay for in college? For example, when you have a headache, you just go to the medicine cabinet and get an aspirin or when you’re hungry your favorite snacks are always in the cupboard. You don’t need quarters to do the laundry now.
4. Be honest with yourself and determine whether your actual or projected expenses are wants or needs.
5. In addition to keeping a particular expense down by looking for the best buy, you can and should set a limit on how much per week you will spend on items such as eating out or ordering in, buying beverages, going on roads trips to see your friends, attending concerts or sporting events and shopping at the mall.
6. Make sure that you have researched the direct expenses at the college you will attend. Check out all of the activity fees and the cost of living in the area. Know how much gas costs.
7. Know exactly what your parents will contribute. Remember, although they may agree to pay for such things as clothing, it may be because they think you will only buy a few things that you need each month. If you go to the mall every weekend and come back with an armful of clothes, your parents may change their minds.
8. Do a first draft of your budget. Does it balance? Do you have extra funds or is the budget “in the red” because your expenses are higher than your available funds?
9. If you are in the red, start making adjustments by adding funds (I will work more hours at my school job). If you are in the black, increase your emergency fund.
10. When you get to school, try to stick to your budget faithfully the first month so that you can see how it is working. Then, if it needs adjustment because you overlooked or miscalculated something, discuss it with your parents and decide what to do to make it balance.

           
                The Honorable John C. Ninfo II, Chief U.S. Bankruptcy Judge, is founder of Credit Abuse Resistance Education (CARE), a program that was launched on the East Coast and has spread to 23 states. The program’s website is www.careprogram.us.

Budgeting Do’s and Dont’s

• If you must use student loan money for living expenses, keep your loan balances down by committing to using the money only for reasonable and necessary living expenses, not for luxuries
• If you are going to purchase a campus meal plan, determine how you will use the plan so you don’t buy one that exceeds your needs.
• Scrutinize your likely communication needs, including long distance and local telephone calls, and find the most cost-effective combination of services that will meet those needs.
• Have only one credit card and avoid using it except for convenience or an emergency. Pay off your balance every month.
• Share the expenses of decorating your dorm room or apartment with your roommates.
• Avoid the very expensive habits of smoking, taking drugs and gambling.
• Avoid ATM fees that aren’t free of service charges by using machines tied to your bank.
• Find ways to buy things in bulk, at discount stores or at shopping clubs. Look for and save coupons.
• Look for places that offer student discounts.
• If you are in a city with good public transportation, look into getting a monthly pass.
• If you are on a large campus, consider using a bicycle to get around.
• Avoid impulse buying on the Internet.
• If you have a car on campus, make sure you park only in authorized spots. Parking tickets can add up quickly.
• Return your library books on time.
• Carry cash with you at all times to buy minor items without using a debit or credit card.
• Keep savings for important things or emergencies that may come up. Late night pizza or a concert ticket to a group you like are not emergencies.