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4 Tips For Budgeting Your Financial Aid Disbursements

When you apply for financial aid using the FAFSA, you’ll eventually receive what’s called a financial aid package, which lists grants and loans for which you qualify. If the dollar amount you receive exceeds costs like tuition—usually billed straight to the school—you may be sent a check that is meant to cover extraneous expenses like living and books. The tricky part about being sent a check, however, is that you are free to do with this money as you please. When you’re still in your teens or early twenties, and you don’t have much experience managing money, it can be hard to be cut a big check and then be told you’re free to do with it what you want, no accountability necessary. Sounds like fun, but it can turn into a nightmare. One of my college friends spent over half of her check on a fancy camera. The check was supposed to last her an entire semester. She blew through it in less than a week. Don’t let this happen to you by following these tips:

1. Figure out how much of your check you’ll need each month.

It doesn’t take a genius to understand that the key to preventing extraneous spending is setting up a budget. Especially when you’re in college, most of your personal expenses are set amounts per month. Add up rent, groceries (if you don’t have a meal plan), utilities, books, and “etc.” for the occasional unexpected expense. Once you have an accurate figure, constantly check your bank account to ensure you haven’t exceeded this limit for the month.

2. Keep your financial aid check money in a separate account.

When I was in college, I placed my financial aid money in a separate savings account. When the first of the month came around, I transferred the monthly amount to my checking account, so that way I knew what I had to work with for that month, and didn’t touch the rest that was in the savings account. Keeping a large amount of money “out of sight, out mind” so to speak, is the best way to avoid temptation.

3. Make a list of needs and wants. Get a campus job to take care of “wants.”

Financial aid checks are distributed solely for the purpose of paying for necessary expenses associated with being a college student. They aren’t meant to cover costumes for college parties, surround sound systems for your dorm room, or any other items you may really want. Not only is it irresponsible, but using government or institutional aid for unnecessary expenses is also very unethical. To avoid that temptation altogether, try working for things that you want. You’ll appreciate them so much more. Almost all universities offer flexible student jobs that take up only a few hours of your time a week. Getting a job will enable you to pay for your wants while forcing you to manage your time effectively.

4. Always overestimate how much you’ll pay for books.

You’ve heard, I’m sure, that textbooks are expensive. While digital books may in the future help drive down costs, and many textbook companies are being accused of price fixing, for now you can bet your bottom dollar that textbooks will be much more expensive than you think. Of course, the best way to save on books is to buy them online used from sites like or eBay. But be aware that sometimes you’ll have to pay full price for a new edition, which can run in the hundreds of dollars for each book. Always research book prices before the semester starts to fit this expense into your budget.

Although managing your financial aid funds can be tough, it’s completely doable, if you’re careful. Whatever you do, don’t spend it on a fancy SLR camera. A camera won’t give you a roof over your head or put food in your stomach. Good luck!

Today’s guest article is provided by Nadia Jones. She attended both a traditional and an online college. She loves writing about her experiences in both these educational settings, and enjoys offering advice to students who are new to university life. She welcomes feedback, so drop her a line at

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