Let's dive into one of the coolest, yet most overlooked, skills you need to stay on top of your money - budgeting.
Calm down! Don't panic. We won't start throwing around scary words like “monthly outflow” or “fiscal forecasting.” Seems like a bit much.
You're in college now – living the dream, right? Late-night DoorDash, coffee runs, textbooks that cost as much as a gaming console – it's all part of the adventure. But here's the catch. These adventures can burn a hole in your pocket if you're not careful about your spending.
That's where budgeting comes into play. Simply put, it means managing your money so you can spend on what you need, save a little, and still have some left over for whatever you may spend your money on.
Alright, so let’s break it down.
- Track Your Money: Improve the relationship with your money by understanding it. Keep track of your income (parents' allowance, part-time job, scholarships) and expenses (rent, food, utilities, entertainment). Check your bank statements or go for an app that simplifies it for you.
- Create Your Budget: After tracking, divide your money into expense categories. Essential stuff like rent, groceries, and textbooks comes first. Then you've got your "fun money" for social events, shopping, and such.
- The 50/30/20 Rule: A popular budgeting method among students. Use 50% of your income for essential needs, 30% for your wants (like that ever-growing Amazon cart), and put 20% for savings or paying off debts.
Remember, it's okay if you sometimes exceed your budget, or you're not able to save as much. You're just starting, and budgeting gets easier with time - like school?
The key is to never stop learning and tweaking your budget based on your evolving lifestyle and needs.
Oh and also - treat yourself.
Yes, you heard it right. A budget doesn't mean saying goodbye to fun. Plan for a small reward for sticking to your budget. Maybe that vinyl record you wanted or a weekend getaway with friends? Whatever floats your boat
Budgeting helps control your spending and promotes a savings mindset, but it doesn't mean you can't enjoy the money you've earned. Budgeting is leading the life you want, without the money-stress monster creeping up in your dreams.
Remember, budgeting isn't about limiting yourself – it's about making the things that excite you possible.