Living within the Student Budget: Can it Be Done?
The short answer is - yes. Data collected from current students indicates that, on average, our students are living within the standard student budget. The next question - how do you figure out if you can live on our budget?
Boston University breaks down the student budget into categories of expenses (room & board, transportation, personal expenses, etc.). In reality, no one spends their money exactly that way.
This approach may help...
Step 1 - Take the total budget and subtract the charged expenses (tuition and fees) and books. Everything else that is left is available to you to use toward your living expenses. Divide by 9 to get the monthly amount available for each month of the academic year.
For 2014-15, the student budget is $65,330. Tuition and fees are $47,188 and books are $1,462. Subtracting these two amounts from the total budget leaves $16,680, or $1,853 per month for the academic year.
Step 2 - Track your expenses. Not easy to do if you don't live in Boston now, but you can make some educated estimates.
The budget figures below show the actual average spending for law students for the 2013-14 academic year.
Average Budget Breakdown
Step 3 - Create your budget. Below are links to budgeting worksheets/applications.
- Use personal finance app for iPhone or Droid - e.g., Pageonce, Mint, CashTrails
Step 4 - Make the most of your money by planning ahead. Review your budget periodically throughout the year and make adjustments to your spending habits as needed.
Establishing and maintaining a budget is the best way to be in control of your finances and ensuring that your money is going towards the expenses that matter the most to you.
We appreciate that Boston is an expensive city to live in, and on a student budget it can certainly feel like there is never enough. For students used to living at a higher income level, this will mean a change in lifestyle.
So what's the point...
Save Yourself over $7,000
Here is another way to look at it -- say that you spent $1,600 per month for the next three academic years, even though you could spend almost $1,800 per month under the Student Budget.
That means that you are spending $200 less per month. If you are borrowing to cover your living expenses this means that you are borrowing $1,800 less for one academic year and $5,400 less over three years.
On a loan with a 10-year repayment term and a 6.8% interest rate (e.g., Federal Stafford Loan), you will repay $115 per month for every $10,000 that you borrow. So over 10 years, borrowing that $5,400 costs $62 per month to repay or $7,440 in principal and interest. The cost to borrow that same amount through a private loan would be higher and so would the savings.
- Save money now, while you're working. Have savings to use instead of a credit card.
- Look for an apartment where your rent includes heat
- Live with a roommate
- Take the T - having a car in Boston is very expensive
- Put off unnecessary expenses until after law school
- Take advantage of student discounts and on-campus activities
- Brown bag your lunch or organize potluck dinners with friends
- The small stuff adds up!
- It may be beneficial to utilize both a savings and checking account. At the beginning of each semester deposit funds into your savings account and transfer just enough each month to the checking account to meet your monthly expenses. Look for a high yield account like ING or HBSC.
The money you live on as a student is not your own if it comes from borrowed funds. Consider this with each and every expense…repayment will come from future income and reduce what you have to live on after graduation.