Important Skill for College

Budgeting 101

How do college students get through college? Planning ahead, making sure that your tests are properly prepared for, right? Keeping the social life and constant studious life balanced? If you live in a place where you don’t pay any rent, you may most likely be set financially. If you live on your own however, you are definitely going to need to know a bit about budgeting. If you want to move into an apartment of your own and you don’t know how to manage your money, you can find yourself in a very tight spot. Sure, spending money on Pizza Hut may seem awesome all the time living in your nifty apartment, but making some delicious beef stew that lasts for days is a lifesaver in the long run. Once you know how to manage your spending that can allow you to cook at home, keep rent under control, and even save money, college may not seem so stressful.

Budgeting is basically using simple mathematics and careful planning within your finances. This is a very important tool to use to avoid debt, overspending, and the overall stress of not being able to afford a living. To start out make note of your monthly income. Write down dates you receive this money as well. Next write out each and any bill in order from the dates in which they are due. It is important to plan all expenses ahead of time so that overspending is not an issue.  Finally subtract each bill from your total income. This is the money that you have left aside from your bills. Make sure to pay these bills on time to avoid late fees. Set a reminder or post them where you can see them. Now estimate the cost of living without bills, such as transportation or gas, and food. After all expenses are subtracted, then you will know your monthly spending limit. You could even divide this by weeks or days, to see a clear picture of your spending limit monthly, weekly, and daily. Also, it would be beneficial to have savings within your budget. Even $20 dollars a month or a couple dollars a week can help in the long run. Savings is literally saving you from financial debt when unexpected events such as, receiving a speeding ticket or needing medical attention happen. Remember, it is better to round up when calculating expenses just to be safe. No one should spend all of their income each month.

A crucial part of budgeting is being able to tell the difference between a need and a want. A need is something you have to have for example food, shelter, and clothing. Now let’s take the time to break this down a little bit more into reality, a step that a lot of people don’t take. Yes shelter is a need but do you need to live in a two story five bedroom brick house. Or would a one story three bedroom house provide the same comfort and safety for your family of three. Does all of your clothing have to come from Old Navy, Dillard’s, or be a name brand? Or are you willing to shop at a thrift store or a resale shop, garage sale, or perhaps Wal-Mart; where you can get the same quality of clothes for a fraction of the price. The same sort of thinking applies when you are shopping for food for the next few weeks or months. Do you plan your meals, or do you just go out and get fast food? Use coupons? Buy the lesser priced food or do you just go with what is simplest and fastest? When you could take the time to plan your weekly meals out and set a realistic food budget. 

A want is something you would like to have in other words things like a new video game or getting your nails done, or that Starbucks pick me up. Wants can make themselves seem like needs they squirm and wiggle into your needs list. Wants make day to day life more enjoyable while needs are necessary for our day to day lives. 

Sometimes we like to think that all are finical purchases are needs but they’re not always. You need to get food at the grocery store but do you really need to get the more expensive brand? A phone may be a necessity for you but getting the newest model with all the bells and whistles is more of a want. Now that you know the difference between a need and a want you are on you way to successful budgeting.

In case of an accident or emergency it is always smart to save your money while budgeting. If you have a job, immediately after getting your paycheck, put about five dollars in your savings account. Sure it seems like a small amount but every paycheck you get, add a little more each time so that you end up putting a total of ten percent of your paycheck into savings, then take care of your main responsibilities; then whatever you have left, THEN you can splurge!  Other ways to save your money as a student can include learning to cook! Making your own meals and sack lunches can reduce spending tremendously. Instead of going out every day stay in a few nights of the week and cook a meal for yourself. You can find plenty of fast easy recipes online that not only are delicious but cheap! If you’re going somewhere try using public transportation. By riding the bus or city train you can save money that would normally be spent on gas. Looking for books for class? Try to avoid getting brand new books from the book store. Buying used books is always a great way to save a few bucks. What harm can it bring? You will only have the book for a semester anyway. It’s surprising how many different ways you can save. Over time those savings can really come in handy.

These are just few examples of how budgeting can help make your life so much easier and stress-free. It is important to recognize these points in your daily lives in order to not get in debt and live pay check to pay check struggling to make ends meet. Recognizing your needs vs. your wants can make a huge difference in deciding on future purposes. Now that you know how to start a budget on your own, you can help prevent from making any financial mistakes and plan everything ahead of time so there is nothing to worry about!