| Living on a College Budget |
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For many, college is jam-packed years of experience. Experience that includes educational learning, freedom, new pressures, unwanted distractions, realizing how quickly money runs out, and new ways of obtaining cash mostly through credit card offers available at your fingertips. Its difficult coming to college, meeting new faces and wanting to do new things, that it’s hard to say no to something if you are short on cash. That’s why many college students find themselves living with unnecessary debt. However there is a key to maintaining your money which relies on a budget. The goal of a budget is to spend less than you earn so you can save for emergencies or treat yourself to something that you have earned and can afford opposed to buying it when you know you can’t afford it.
The core of budgeting is to see your monthly spending needs and habits. The purpose of a budget allows you to track your personal cash flow. Your personal cash flow is how much money comes in and how much goes out, usually based on a monthly basis. Follow these next three easy steps to better budget: 1) Keep track of your spending This might seem tedious and annoying but keep track of all your spending for one month so you can see exactly what you spent and on what. Whether it is lattes, alcohol, or take out, you’ll be surprised at how fast it adds up. 2) Categorize your income and expenses Prepare an account of what money you are spending. List all monthly income. This includes salaries from jobs, Federal Work-Study, allowances and any other income. List and total all your monthly expenses. This is a good time to take out your list of monthly spending and record it here. Here are some categories to follow: 3) Compare Now compare the total of your income and total of expenses to create your budget If you can't find ways to cut down your expenses, then take a good look at what you consider "necessities." You may not think twice about picking up a latte every day - it’s not a huge cost. However if a latte is $3.00, you're really spending: $3 per day = $90 per month = $1,100 per year If you skip your latte a couple of times a week or get a smaller portion, then that's more money you can put towards more important things. Save, Save, and Save Some More It’s good to have three to six months worth of living expenses in emergency savings. Once you've established your monthly budget — and can stick to it — try saving three to six times that much in a savings account or investment you can easily have access to. It's okay if it takes a while, just as long as you're putting something aside each month. However alcoholic beverages, a pedicure before a trip to the beach, or a new outfit for Friday night is not considered emergency cases. This money is to be used for emergency purposes only, such as car trouble or medication for an illness. Before you know it, you’ll be out of any debt you owed and earning interest off of your savings. |
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