These days, college can be expensive. Because the cost can be quite high, you might be looking for ways to boost your college savings and make that cost a little less daunting. Take a look at some of our best budgeting tips to easily put more money toward college savings.
Determine Monthly Expenses
One of the first steps to budgeting properly is to determine your monthly expenses. While the total amount you spend probably varies each month, it’s just as likely that you have several expenses that are the same from one month to the next. Such expenses would include your mortgage/rent, car payment, utilities, and so on.
But no one’s budget is exactly the same every month, is it? In addition to the expenses that are the same every month, you should have an “extra” category in your budget for one-off expenses. Maybe you don’t go to concerts often, but a friend from work invites you to one, and you agree to go.
The nice thing about having an extra category is that you probably won’t use all of this money every month. As a result, you will have a steady flow of cash to put into college savings.
People sometimes focus on the smaller expenses when they think about trimming down their budget, but those expenses usually have a smaller impact in the long run. You may be able to save more if you focus on your larger expenses first. For most of us, our mortgage or rent, car payments, and food costs are much bigger than the morning coffee.
Of course, it may be difficult to move into a smaller house or give up a car if you have a big family, but any amount of saving on those items will make a big difference.
Try a Zero-Based Budget
Zero-based budgeting is quite popular, especially for those who like to be highly organized (and disciplined). That’s because the idea behind zero-based budgeting is to have every dollar assigned to a budget category. The goal is to have zero dollars left, hence the name.
To be clear, having a zero-based budget doesn’t mean you can’t have any money allocated to things like entertainment or travel. It just means you decide ahead of time how every last dollar will be spent, and then stick to that plan. Then, any dollar left over can be put toward college savings.
Don’t Eliminate Every Expense
One thing that’s important to remember about budgeting is that its purpose is to keep things under control. Its purpose is to be sure you don’t get off track with your finances. Its goal is not to deprive you of the things that make you happy.
In other words, if there are things you would hate to give up, don’t think it’s necessary to do so simply because you are setting up a budget. Focus more on the low-hanging fruit - those items you wouldn’t really miss. This goes back to prioritizing savings. Start with the less essential items and work your way through. Don’t immediately give something up because you think you are “supposed” to do so.
Don’t Forget Seasonal Expenses
Do you travel for Thanksgiving? Or give lots of gifts during the holidays? While there are certainly ways to cut back on holiday expenses, that is a topic for another article. For now, it’s worth mentioning the fact that your expenses may be higher during these times of the year.
Depending on your disposable income, you can either create a whole separate budget for each holiday, changing the amounts allocated to other categories as well. Alternatively, you could try to fit your holiday expenses into that “extra” category mentioned earlier. Whichever approach you decide to take, don’t let these temporary spending increases catch you off guard.
Automate Common Expenses (and Savings)
You can - and should - automate any essential expenses that are the same every month. Typically, that will mean housing expenses, car payments, and utilities (including cell phones, internet, etc.). Automation is always a good idea because not only is it simpler, but it also makes those expenses out-of-sight, out-of-mind.