Money. It is not an easy thing to manage, especially in college. There are so many expenses, ranging from essentials like books to things like Sunday brunch. Everyone loves making the microwave mac and cheese joke, and it seems like more times than not we’re stuck with three dollars in our bank accounts. Whether you work multiple jobs or only have a bit of spending cash, budgeting is essential.
Creating one that works isn’t easy. It seems like every piece of advice says “if you don’t stop buying Starbucks, you can’t buy a house.” That isn’t true, and cutting off the things you love will only lead to you breaking this said budget. The key is to create a sustainable plan, one that makes sense and that you like. As someone who has overspent one too many times, I’ve been forced to learn how to manage my money. I’m here to tell you all of the things you need to know, so you don’t also have to learn the hard way. Let’s get to it.
Figure out how much you’re working with, and for how long.
First and foremost, you have to know how much money you have. I like to do this monthly, and I plan out all of my expenses every month. I get paid bi-weekly, so when planning out my total I also factor this in. If you don’t have a job or your payment schedule is different, this might not apply. You can also do this weekly. You can do what works best, as long as you’re aware of how much money you have.
Write out all of your expenses.
Groceries, your phone bill, sushi, toothpaste, Spotify, everything. Be detailed. Do not leave anything out, because that is how bad habits get started. You do not have to give up the things you love. In fact, you shouldn’t. If you do, you’re going to give up the budget you worked hard on and that would put you back to square one.
After you write everything down, add up your total. Then, take the number from step one, and subtract this one from it (this is called your net cash flow). If the number you have left is one you’re okay with, you’re good. If not, it’s important to rethink, and maybe get rid of the expenses you can eliminate. For me, my daily coffee, eating out less, and sticking to generic brands at the grocery store, help the most. Once you’ve gotten to a place you like, sticking to it is the next step.
Open a savings account.
I could talk about the value of having a savings account all day long. By having money in one, you are less likely to overspend because it’s not easily accessible to you. Of course, this only works if you actually have money in it, which brings me to tip 3.5: decide how much and how often you’re going to deposit money into your savings account. Decide what is feasible, so you can stick to it. I do 90% of every paycheck, but you could do a different amount, simply add extra cash, birthday money, etc. A good benchmark is 10-15% of your paycheck should go into savings, a retirement account, an emergency fund, etc. Again, the key is to find something you can actually keep up with.
Be mindful of your spending.
With most of our world being online, it’s so easy to buy things. “Add to cart,” Apple Pay, and “discount code in my bio” are my biggest enemies. So many cool gadgets make their way on my FYP, and before I know it I’ve bought an avocado slicer (hello, what about the rainbow knives I bought last week?). Buying what I wanted, rather than what I needed, definitely got me into some financial trouble in a not-so-distant past.
To fix this, I started to ask myself some questions:
- “Do I really need this?”
- “Can I see myself using this often?”
- “Is the price reflective of its value?”
- “Will I still find this interesting three months from now?”
- “How do I benefit from this purchase?”
- “Will I regret this purchase?”
All of these are questions I ask myself before I buy anything. If I am satisfied with my answers, I go ahead with my purchase. If I’m not, I don’t get it.
Set boundaries with yourself.
The first place your money should go is where it needs to. We all have essential expenses, and those should be the priority. That doesn’t mean you have to give them up. Warren Buffet said, “Do not save what is left after spending, but spend what is left after saving.” That is the exact principle here, so do with that what you will.
To make it easier to actually put this into practice, I have started to create rules for myself. I used to pay for several subscription services, but I’ve given them all up, except Netflix so I can get my coffee instead. I also love makeup, so I treat myself to an eyeshadow palette if I spent less than intended during a given month. This not only prevents me from overspending since I’m not restricting myself, it motivates me to spend even less because I know something will come out of it.
Spending money does not have to be an internal battle. Budgeting is something that helps make that journey a little easy. It’s difficult not to get caught up in the idea that budgeting is all or nothing, so it’s crucial to create a flexible plan that you’re happy with. That way, you can stick to it while giving yourself the leeway to get what you want and still pay for the things you need to. It’s all about balance.