Dan Geltrude, managing partner of Geltrude & Co., joined Cheddar News to discuss why it's vital for a college student to begin budget preparations early for college tuition. "It's developing good financial habits," he said. "I'm a strong proponent that in high school, there should be some teaching, some course ... about personal finance."

Dan Geltrude, managing partner of Geltrude &amp; Co., joined Cheddar News to discuss why it's vital for a college student to begin budget preparations early for college tuition. "It's developing good financial habits," he said. "I'm a strong proponent that in high school, there should be some teaching, some course ... about personal finance."

Closing Bell

Stretching Your Dollar: Setting Up a Budget for College

It is time for stretching your dollar where we give you tangible tips to help you make the most of your money. Well, it's college Decision Day and in a few months, millions of high school grads will be living away from home and managing their money for the first time. A recent survey of 20,000 college students by ever showed how under prepared many actually are for this milestone with just about 33% saying they felt ready for the task. So joining me now is Dan managing partner at the financial consulting from and company Dan. It's good to see you and look, it's a very important topic and probably a good time to get started. Why is budgeting so important? Especially when you are young? Well, it's first of all developing good financial habits. I am a strong proponent that in high school there should be some teaching some course, some semester, some marking period, whatever you want to say about personal finance and how to handle your finances. And part of that should also cover, for example, how to determine how much what you should spend on going to college in the first place. And taking on debt. So I think a lot of our high school students don't get that. So now they get dropped into college and they've never had to manage their money at all. So the key here is, is you have to set up a budget and you have to understand how to work through a budget. Now, you can use something like an Excel spread cheat to do that or, you know, the young people these days, certainly there are many apps out there that you can simply follow to figure out how much you should spend. Ok, so let's talk about this fact that if you are in college, you might have a job, you might have a work study, but a lot of college students, they don't have an income dan. So in that case, how do they manage allocating money to different buckets? Uh Well, how about this one? Maybe they should have a job. So it should start with that. So if you're looking at, for example, setting up your budget, so start with what your expenses are gonna be. How much do you need for your housing costs, for example, those fixed expenses? And then what about the extras? Like when you're ordering pizzas or, and you wanna go out for a drink, iced tea? Um And then what you have left over if anything based upon how much income you're gonna have, if you don't have a job, the first question should be maybe I should. Yes, I think a steady stream of income definitely is a good way. Not just to manage your money, but also time management, which can be an important lesson in college as well. So, for anyone who thinks I'm ok with money, I don't feel like I overspend and I don't want to do the tedious task of writing every single expense and budget down. What would you tell those people? This is what I would tell those people. You don't think you need a budget. You do and it's no different than why you have to weigh yourself every day. Because if you don't track your weight, if you gained a pound or two, you're aware you get right on that. Do a little more exercising, a little less eating. It's the same thing related to budgeting with your finances. You want to be tracking that consistently when you realize you overspend. Uh Oh, something's got to give here. So my advice is you must have a budget and you must track it and the best way to do that just in general. And we see that now is the 50 30 20 rule. You spend 50% of what you have on necessities, like your housing and your food, 30% on the things you wanna have like dining out or entertainment and then 20% you need to save whether it's retirement, whether it's an emergency fund, whatever the cases, that's a great place to start until you can figure out how to manage. And dan the importance of course, of managing money, being familiar with your money and setting up a plan if you do have student loans, which many people in America do. What's the importance if that's a burden that you are saddled with? Well, the first thing you gotta set your mind to is you're gonna have to pay it back. So don't go into, uh, a, a mindset of saying I'm gonna take all kinds of debt and it'll get forgiven. That is not a good planning tool. You have to figure out what you think you're gonna make in your earnings. And there's plenty of information out there and say, how much do I now have to allocate to be able to pay my student debt back because that debt never goes away. You're stuck with it. So you're gonna have to pay it until it's until that's completely gone. All right, Dan, rude. Great tips. It's an exciting day. It's college decision day. Uh, but always good to keep it in perspective. Dan is managing partner at the financial consulting firm and company.