Student Budgeting Tips
With Spring Break well on its way, students are likely already planning for their getaway. More than just spending time at the beach, this break means travel, food, shopping, and for those 21+ it also means bars! Needless to say, all these costs combined can break your bank if you aren’t mindful of your budget. So, before you decide to just spend X amount of money and then find you’re low on cash for the next month, consider balancing all your other expenses, beforehand.
Here are some basic tips to making a successful budget:
If you haven’t already, set up a checking account
Almost all major banks have mobile app capabilities with perks such as alerts (for when you spend over a certain amount or come close to the red). Also helpful are money trackers that tell you exactly where a certain amount of your money went for the month (Usually in the form of a pie chart), which really helps you visualize how your money is distributed.
It may be tempting to pretend that you don’t spend as much as you do on certain things, or that you earn a little more without calculating taxes or costs of working (gas, bus fare, etc.), but this is a surefire way to get yourself in the red. Therefore, you should always be honest with yourself about how much you’re spending and earning. If you aren’t 100% sure about all your expenses and income, it’s always safe to guess low for income and a bit higher for expenses. Exact costs are always best, though, so try to dig through your past expenses and receipts to find accurate numbers.
Note: if you have an extra but unreliable source of income, consider leaving it out of your base income and allotting it to your savings or extra expenses.
Differentiate your “wants and needs”
Do you really need those pricey caffeinated drinks every day? While some of your expenses may appear useful, it’s important to consider whether or not you can live without, or if it’s a necessity. Admitting you don’t need those extra costs is the first step.
Prioritize your needs
After determining your income and prioritizing your main needs, list all the most urgent/important bills and add up all their costs. These are the costs you can’t live without, such as rent, basic groceries, and expenses that help you get the maximum out of your income (such as uniforms, transportation, and necessary equipment). These are costs you cannot compromise with.
Make a miscellaneous category for your budget
In the short term, it’s more than possible there will be an unexpected and necessary expense here and there. Examples of this are (not limited to) a visit to the doctor/pharmacy, a car oil change, a visit to the dry cleaners, and even a school field trip. It’s good to allot a certain amount of money from your budget to unexpected expenses.
Make a savings budget count as an expense
Before you begin thinking about all the money you now have left over to use for recreational expenses, it’s important to have a little foresight and save for the future. Your savings could be for a short term goal you’re sure you want to reach (like a vacation), a long-term goal (like buying a car or house) and/or a safety net in a tight situation (car repair or large medical expense). Also, If you don’t spend the money allotted for the “miscellaneous” category, don’t spend it, but put it into your savings—this way your budget is consistent.
Keep your bills and receipts and update your budget as needed
Over time, you may gain or lose expenses so it’s important to keep track of what you find yourself spending more for. If your income rate changes, you should definitely recreate your budget to fit your new income. Consider re-calculating the budget every 3-6 months, and whenever there is a dramatic change in your finances. Saving your bills and receipts is also useful for filing your taxes.
Pay cash for your recreational expenses
Give yourself an allowance for your “wants” and pay it out to yourself in cash. Seeing the money in real-time may help curb your spending.