Back to School Budgeting: How to Live on a Graduate Student’s Income

Back to School PicIt is back to school time once again! Luther Seminary, where I work, is buzzing again with students and professors beginning the new school year. The start of a new school year is always full of excitement and anxiety. How will your classes be? Will you be able to complete all of your assignments? How will you be able to pay for all of the tuition, books and living expenses? This last question is especially hard if this is your first year in graduate school, and even more difficult if you are entering school again after a salaried position. How will you survive on such a small income made up of some student work money, scholarships and loans?

As a seminary graduate, I can tell you wholeheartedly that it is possible! Here are some tips to help you downsize your expenses and begin living like a student:

  • Values: Start by considering your values. What are the things that matter most to you? Family? Giving? Saving? Travel? Make sure that your spending reflects these values and priorities. When you are in school, it can be really difficult to completely match your spending with your values because you are trying to live as frugally as possible. However, it is vital that the things that are important to you stay at the top of your list. Resist the urge to give priority to the urgent expenditures over the important ones.
  • Create a Budget: Whether you have had a budget before or not, having a defined budget that you can stick to is vital to living frugally as a graduate student. A budget is just a plan for where your income will go over the course of a month. Need some help creating a budget? Check out these articles and stay tuned for budgeting 101 coming up in two weeks!
  • Needs vs. Wants: Distinguish between needs and wants. Just because something is a want doesn’t necessarily mean that you can’t have it. But, you may need to do some prioritizing to see if this is possible. This step is incredibly important if you are coming from a salary or if this is your first time supporting yourself. You may be used to a certain standard of living that you can no longer afford.
  • Savings: While it may seem difficult to save money while you are in graduate school, it is a good practice to start. Even if you can only save $20/month, that $20 can make a big difference when unexpected expenses come up. Start building an emergency fund for yourself.
  • DebtMore than likely, you will need to take on some sort of debt while you are in graduate school. Be aware of how much you are taking out and begin formulating a plan for how you will pay it back after graduation. Resist the urge to treat your loans as “free money.” Only take out what you will need, there is no harm in returning money that you will not use. The less that you take out now, the less that you will need to pay back later.
  • Giving: Some people choose to give money regularly during school, others do not. Giving, even just a little bit, during graduate school to the church and other non-profits was one of the most freeing things that I did during graduate school. So often, I felt like I was just receiving (loans, scholarships, knowledge), it was wonderful to be able to give back and make an impact. Even if you start small, this a great habit to form. Similarly, there are many creative ways to give back that don’t involve giving money.
  • Frugal Lifestyle: Most likely, your lifestyle will change as you enter grad school. Take some time to think about the little places where you can save money. Look for places where you can save on regular expenses like your grocery bill, rent, transportation expenses and other regular bills. Also, take a look at how you can save on your variable expenses like shopping and entertainment. This blog features a whole host of tips to help you save money on just about everything from fitness to vacations! Frugal living can be a lot easier and more fun than you think!

While living on a graduate student’s budget can initially seem really daunting, it is definitely doable. It is all about trimming the fat. Distinguish between the needs (meat) and wants (fat), and trim the meat keeping in just enough fat to keep your meat tender, not tough. In other words, budget in just enough money for “extras” to keep yourself sane and happy.

Happy New School Year!

Join the Conversation: What advice do you have for new students who are moving from a salary to a graduate student’s budget?

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