Managing Your Finances: 5 Fool-Proof Ways to Keep Yourself on Budget
July 30, 2014

Most college students have a hard time keeping themselves on budget because they have never had to manage their own money. If you are not used to paying bills, buying your own food, and keeping toilet paper stocked in your house, chances are you will come up short at the end of the month. Before struggle to manage your  finances, you can follow these five fool-proof ways to keep yourself on budget.

5 Fool

Bills in the Bank – The Rest in Cash

Perhaps the most simplistic and effective way to keep yourself on budget is to separate your bill money and personal spending money. Keep the money you need for your bills in the bank and take out anything extra in cash. You can spend the cash on food, gas, and other personal items that you need throughout the month, and you will still have confidence that you can pay your bills with what is in the bank. Just make sure you follow through with paying your bills when the time comes.

Using cash for personal expenses will help you visualize exactly how much money you have to spend throughout the month. A Dun and Bradstreet study from a few years ago showed that people spend 12% to 18% more money when they shop with credit cards instead of using cash. Why? Because swiping a card seems like less of a commitment than handing someone cash. When you can see a pile of twenties dwindle down to a pile of pennies, you quickly learn how to moderate your spending throughout the month.

Break up Your Bills by Paycheck

If you get paid weekly or biweekly, learn which bills you can pay on each paycheck. For instance, you might pay your car payment with your first paycheck and your rent with your second one. If you have this planned out every month, you won’t have to worry about how you’ll pay bills X, Y, and Z.

We have to put out a slight disclaimer for people who rely mostly on tips instead of paychecks. If you work as a restaurant server, stylist, bartender, or other service worker, you might want to deposit all of your tip money into the bank until you have enough to pay a bill. Do this for the first part of the month until all of your bills are paid. Then the rest of the money you earn for the month can go to personal spending. Just note that you will need to save part of it to use for the first two weeks of the next month when your bills are due again.

Separate Your Bills Money into Envelopes

This is considered a fairly antiquated way to manage your finances, but nevertheless, it works every time. The idea here is to put the money you need for each bill into its own envelope so that you don’t use one bill’s money to pay another. For the most part, this process works best if you want to save money each month because you can keep an envelope purely for savings. You can still use it strictly for bills though if you do not have enough left over to save each month.

There are a couple different ways you can approach the envelope method for budgeting. You can either save for each envelope one by one or put a little bit of money into all of them all at once. Most people work best by prioritizing their bills and saving for the most important ones first. If you only have a couple bills to pay each month, you might get away with the widespread option instead.

A More Modern Alternative

Instead of using envelopes to separate your money, you could put your funds on different prepaid debit cards. Then all you have to do is use the card designated for each bill when the time comes to pay it. Just note that you may have to pay fees for spending money on your card, either from the prepaid card provider or from the billing company. You may also have to pay annual and monthly fees to keep up with the card, which may cost you more than the convenience is worth. If you decide to go about this modern alternative, make sure you choose reloadable prepaid cards with low fees across the board.

Pay Your Bills Ahead of Time

If you get lucky enough to have a lot of money in the bank, pay your bills ahead of time. This will give you a little cushion if something goes wrong in the future. One of the best times to do this as a college student is to use money that you get back from school to pay your bills for the semester. Of course, this only works if you actually get a refund back from school after your tuition and fees are paid for.

If you can’t pay all of your bills ahead of time, try to pay early for the ones you struggle with the most. Rent, auto loans, and insurance are the most common bills people pay in advance because they are consistent, predictable, and pricey. Adjust your budget accordingly.

Distinguish Your Wants from Your Needs

One of the biggest reasons why people go over budget is because they cannot tell the difference between what they want and what they need each month. You need a roof over your head and water in your faucets. You want a Crunchwrap Supreme from Taco Bell. While there is the argument that you need food, the fact is that you don’t need that kind of food. You can survive on Ramen Noodles if that is all your budget will allow for.

Put all selfishness aside and start to see your wants and needs for what they really are. Once you realize that, you can prioritize your needs over your wants and hopefully keep yourself on budget at the same time. It may not be easy to transition into this lifestyle, but it will prepare you for better spending habits in the future.

Keep your financial aid on budget as well. Click here to sign up for’s free student loan tool. Also read our blog often for lots of student loan advice and money saving tips.