The basics of budgeting are to form good financial habits and develop an awareness of spending. A budget is a guide that keeps you on the path to reach your financial goals. If you think of it more as a spending plan it may be easier to get a better feel of where your money goes, here’s how to get started:
Create a Spending Plan
Pay Yourself First!
In order to save money, you need to have a plan, and incorporate it into your monthly budget. Pay yourself first. You know you need to pay your car insurance and your cell phone each month – why not yourself? You are the most important “bill” to pay.
While there are multiple ways to meet your goals, a little planning and understanding of how finances work can help. Adding “savings” to your expenses on your budget is a great way to start healthy saving habits.
Think About Your Sources of Income
- Will you be working a job off-campus?
- Do you have student employment funds you plan on using?
- Will your parents be giving you some weekly/monthly/occasional funding?
- All of these amounts will add up to your income
- Use this worksheet to keep track of your weekly income
Know Where Your Money Goes
What are your weekly, monthly and unexpected expenses?
Write down every penny you spend – from school expenses and bills, to your morning coffee and pack of gum!
It can be as simple as using a notebook or download a free app on your phone, such as Mint or Expensify.
Use this simple worksheet to track your weekly spending
Create Your Spending Plan!
Review and Adjust Your Plan
After the first month, evaluate how you did and make any changes your feel are necessary. For example, what happens if your expenses are more than your income?? You will either need to increase your income or reduce your expense.
Tips to help you save
1. Make your own coffee
2. Pack snacks before you leave the house, use a reusable water bottle. This reduces the amount you spend at vending machines or buying fast food, and keeps you healthy
3. Try generic brands of items you buy regularly
4. Save your loose change - Putting aside fifty cents a day over the course of a year will allow you to save nearly 40% of a $500 emergency fund
5. Borrow books – see if you are able to rent books instead of purchasing them or borrow from a library. If possible, try buying used books to save costs
6. Don’t use spending money as retail therapy
7. As you move forward to make any purchases, ask yourself “Do I need it?” If you think you do, wait a bit. Don’t buy something on impulse
8. Live like a student. This means living within your means. Evaluate your wants and needs, remember that you are a student first!
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