By Lawrence Persky
Welcome, new and returning Bruins!
The new academic year typically brings many challenges for students, and this one is no exception. Actually, California’s fiscal crisis could make it one of the most challenging years in recent memory for many Bruins, since diminishing state support for public universities caused the UC Regents to increase in-state tuition and fees to $12,192 for this year.
The University of California’s Blue and Gold Opportunity Plan will cover tuition and fees for in-state students whose families earn less than $80,000, but students still face big expenses in other areas. Housing, food and transportation costs are hurdles that can impede students’ ability to complete their degree in a reasonable time frame. Some even face additional expenses, such as dependent children, unplanned medical bills or credit card debt. The total cost of a college education clearly goes far beyond just tuition and fees.
It’s critical that students establish a reasonable budget at the start of each year to help manage their expenses before they get caught up in studies. Creating a budget and financial plan may sound intimidating at first, but with a little practice and experience, it becomes less of a burden over time and something you may start to do without even realizing it.
Budgeting does not have to be complex and revolves around a few basic principles. The first is knowing the total amount of money you have available to spend. For many students, financial aid is their main source of income (they can look forward to receiving refunds soon from their BruinBill accounts).
I still remember the joy I felt as a student, seeing that large sum of money posted to my bank account. I quickly realized, however, that this money had to last me the entire quarter, especially since I didn’t have any other financial resources.
The next budgeting principle is identifying all of your expenses. I knew I had certain fixed expenses ““ tuition, rent and books ““ that were billed to me monthly or in one lump sum, but typically remained predictable. But there were also variable expenses I would incur, such as food, clothes and entertainment. These amounts would always change depending on what I purchased.
To create my budget, I listed all of my fixed and variable expenses with estimated figures, then tallied the total. If my expenses were far greater than my available resources, I either had to find a way to get more money or scale back expenses.
The last budgeting principle was making sure I paid for what I needed before spending money on other things. This is probably the most difficult for inexperienced budgeters because it requires separating needs from wants, even though both are expenses.
This forced me to prioritize my needs, such as paying for housing or a meal plan, over my wants, which at the time were video games and going out with my friends.
If I wasn’t careful and spent that money on my wants, I could have been in a lot of trouble. I could only think about my wants after I had taken care of all my needs.
By sticking to these three simple principles, I was able to successfully manage my finances over the course of my college career.
There will be hiccups along the way, such as not having enough financial resources to meet your needs or unplanned expenses. In these situations, you may want to consider taking out student loans or gaining employment to bridge the gap between your resources and expenses. You could also work on building a savings fund that you can tap into from time to time when money gets tight.
If you are interested in student loans or need more information on budgeting, make sure to check out the UCLA Financial Aid Office’s website at fao.ucla.edu or the U.S. Department of Education’s website, studentloans.gov, for more information. Also, mint.com is an excellent site for new and experienced budgeters alike to use when managing expenses and offers helpful tips when building a financial plan (they even have a mobile app for your iPhone!).
Persky is a supervisor in the Financial Aid Office’s counseling unit and a member of UCLA’s Economic Crisis Response Team.