When I was in college, the last thing I wanted to do was keep track of my expenses and create a budget. Booooooring. But now that I’m an adult (though it rarely feels that way) I’m finding it more and more important to keep track of money going in and out of my accounts. I wish this was something I paid attention to in college, because for someone with my level of disorganization, these skills could have been immensely beneficial.
While budgeting has not come as naturally to me as it does to others, here are a few helpful tips that have ensured I stay profitable over the years:
Needs vs. Wants
This one I learned at a young age. Growing up, my parents made sure I understood the difference between needs and wants (to the point where I now get anxiety if I splurge on a “want”). Without going this far, it’s important to realize what is considered a need vs. a want. Is it something that is absolutely necessary for school/living? This is probably a necessity if it will help you survive at college. While you may want the top-of-the-line technology, can you make do with something less expensive? Probably. Reign in the expenses by sticking to the lower-cost necessities.
Create a budget. This is probably the most tedious thing I can think of, but it’s entirely necessary. Looking at all of my monthly recurring payments put into perspective how much I was really spending each month, allowing me to see what my actual disposable income was. Making $2,000/month sounds much different than say $500 after taxes and bills. Knowing your disposable income per month (or even week if you prefer) is half the battle.
Track as you go
Armed with the knowledge from creating your budget, you can now track your monthly expenses to know how you’re doing at staying on target every day. I signed up for a Mint.com account about a year ago and it has made it so incredibly easy to manage my daily spending. I’m now slightly addicted to the android app and check my spending compulsively, even on the go. I love it because I can see where the majority of my money goes, and it helps me to figure out where I can cut back.
I was hesitant at first to sign up because you have to link your bank/credit accounts to Mint.com in order to take advantage of it, but according to my research, they have bank-level security, so my fears were mostly alleviated and I gave it a go. If you don’t have a smart phone or don’t want to use this feature, you can also track your spending online. I don’t use this feature as often but I like it to track trends in my spending and see some of the more detailed breakdowns of my accounts. Once you get the basics down, you can even create savings goals, to help you save for spring break or something else you want!
The bottom line of all this is simple: make sure you’re not spending more than you’re earning.
I hope some of my own experiences prove useful to all of you current college students out there. If you want to know more about managing your finances in college, check back next week when I’ll be tackling the highly-debated issue of student credit cards, dun dun dun.
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