Personal finance and budgeting in college

By John Linderman

Elm Staff Writer

There’s a unique sense of dread that comes with opening up the banking app on your phone. When we see our $2, $5, and $10 purchases add up and deplete our checking accounts, it’s hard not to feel guilty. We start to feel that our purchases own us rather than the opposite. At the same time, college is typically the first step towards adulthood, and that includes financial independence. It’s important to familiarize yourself with personal finance to keep your money in check for today and tomorrow.                                                                                                                   

Budget with Today’s Money

Budgeting is more than just forecasting your weekly spending habits, it’s pencil-and-paper discipline. “Budgeting means writing everything down,” said Associate Professor of Economics Dave Wharton. 

Real budgeting is knowing both how to spend your money today, and analyze your past spending habits. Mental accounting, on the other hand, incurs what behavioral economists coin as “myopic loss”, whereby the tiny purchases we make add up to drain our accounts. Actual weekly budgeting cuts these risks entirely, and can save up to hundreds of dollars that can go into savings. 

“Do your very best not to spend more than you can pay for,” said Assistant Professor of Business Management, Sam M. Walton Free Enterprise Fellow Lansing Williams. 

This includes comparing your biweekly or monthly income to your purchases. Phone apps like Mint can also help with tracking your spending habits and dispensing advice.

If you feel confident with your income, considering investing in stocks through apps like Robin Hood, and accrue additional income through returns and dividends.

Meal Prep 

Meal prep is usually associated with dull, dry, daily servings of chicken and rice in foggy plastic containers. It’s leagues below hot food you can order out for dinner. However, nightly purchases of Dominos or take-out can add up to $60-70 a week. Considering to prepare your meals a week in advance could save you money and many upset stomachs.

“Given that the average American household spent $3,365 on meals away from home in 2017, according to the 2017 Consumer Expenditures study from the Bureau of Labor Statistics, implementing a meal plan is a smart way for families to optimize savings,” according to USNews in 2019.

Understanding the concept of meal prep and applying your own sense of creativity and taste can save you half of that. With preparing your meals a week in advance, you can personalize the macronutrient and health quality of your food. Buying in bulk helps with this as well. If you lack the kitchen to cook however, consider buying ready-made meals in advance and portioning them out over the week.                                                                                                                  


Savings are a direct investment into the future. This could be for a job, trip, or big purchase like a car. Understanding how to save is crucial for personal finance. 

“Savings means paying yourself first,” Prof. Wharton said. 

One creative way to save is to package some cash into an envelope, and open it up for yourself in 30 days. This way, your cash has the safety of a piggy bank, but not locked up in perpetuity. Understanding how your savings account works in your bank, and also how it can accumulate interest, might also be worth a read.

Start Building Credit.

Credit cards post-Great Recession seem like either a toxic path or necessary evil. However, credit, and your credit score, are absolutely necessary for big purchases like a car or a house. Your credit score determines if you can secure a loan and the interest rate on it. 

Before researching any more technicalities on it, talk to your parents about setting up a credit card if you don’t have one already. A great starting plan is to use a credit card only on necessary, one-time purchases like gas. This way, your credit card bills can stay low, and good credit can sprout for your family and businesses alike to enjoy.

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