If you're anything like me, you have made a few purchases slightly under ten dollars, only to realize when you check your bank account balance that there's a lot smaller number than you anticipated. Ironically, even the most fiscally conservative budgeting college students like myself still struggle to stay on track with their plan.
Money is arguably the biggest struggle of nonacademic aspects of college life, and few of us are experts at living on our own at this stage. With that being said, though I will openly admit my own faults in following my budget at times, heed the advice of this finance major and his practical solutions to managing money.
Know Your Time Frame
Many expenses will be paid in different spans of time (semester, monthly, weekly, daily, etc.), and the inconsistency of these necessary payments can throw off some of your financial plans. As an active of Civitan Men's Club, I know I will have a significant payment to make at the beginning of the semester. If you live off campus, you might have a monthly rent plan. Groceries could potentially be a weekly payment.
Since the consistency of these payments don't align, it's often good to have budgets in multiple time frames. I have a budget for each semester, month, and week. I start with the realistic number to split between two semesters and also have about 25-30% of cash left at the end of the school year. I then write what semester payments I need to make before setting a monthly number. Whatever the remaining value after said payments, I then divide it into the number of months in the semester. Next, I automatically deduct my monthly payments from the monthly budget before starting my weekly budgets.
The trickle down effect of this budgeting practice gives me a realistic idea of what I can spend from day to day; weekly goals are easiest to achieve simply because it's faster to see success in your budget practice.
Expenses That You Don't Like
There are many things that are either required payments or expenses that should take priority. Bills should take top priority, since you are required by law to pay them. Next would be anything required for classes, followed by groceries and personal care items. These are expenses that must be paid over others, so after these are covered, I personally save the rest and plan for remaining expenses.
Expenses That You Do Like
The items in this list are more leisure items that can be done without, but most of us as college students make these purchase decisions regularly. After you have successfully counted the money saved from your necessary expenses, my personal route to start next is to plan for eating off campus. Many times you will feel compelled to get away for a meal, and it helps to have a plan of attack when spending money on your food away from campus, since prepared meals tend to hack at your bank account.
You could use the money for weekend event plans, traveling places, or on Netflix and Spotify accounts. As a brand representative for a clothing company, I often save money to buy clothing from the company, since I have a responsibility with them to wear their brand. For you, it could be saving for apparel that your club or tribe makes, or just for clothing that you may want or need with changing seasons.
With these types of expenses, the sky is the limit on what you can spend money. However, plan to have about 25% of your retained earnings saved for miscellaneous expenses that could be required at any time.
Organizing and Following Your Budget
A big issue with creating a budget is having the place to record it or having it in an easily accessible location. I keep my budget in my daily planner, so as I'm looking at the coming days, weeks, and months, I'm taking into account my financial situation in addition to the activities I encounter. I know many people who have apps on their phones, and some who use legal pads--basically if it works for you, do it.
For those that can easily follow their own budget perfectly every week, I tip my hat to you. For the rest of us who splurge more than we need to, forgive yourself, but learn from your mistake. The easiest thing to do is go over your budget and then cheat on any other budgets that follow because you already did once before. It is important to tell yourself to make cutbacks on the coming weeks to overcompensate. If you find it impossible to follow the budget you created, then reconstruct your budget.
I advise you to save at least 10% of your earnings to put toward charitable giving; in my situation, I believe in tithing to my church home. Try to keep as much cash on you as you feel comfortable with, because psychological studies suggest that you are less likely to spend money with cash than with a card. Save your coins into a coin bank. Lots of times we disregard the value of change, but right now, I have about a steak dinner's worth of coins in my room.
My ambition as a finance major is to use my financial planning skills for the assistance of others. It's a skill I don't just intend to use for a career, but would love to help any of my fellow MC students in the area. That being said, comment below if you would like for me to meet with you and give my personal advice to your situation, or if you have any questions for me to answer about budgeting.
Always spending money on food