For the most part, college is where we learn to manage money on our own for the very first time. It’s the beginnings of budgeting, financial mistakes, and financial freedom. Done right, budgeting money in college can open time and energy for you to focus on what truly matters. Money is supposed to augment your life, not hold you back. So sit back, relax, and re-evaluate how you go about your spending habits, and how budgeting now can change your life in the future:
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Keep Track of Your Numbers: I cannot stress this enough! The first and most important step to financial freedom is knowing what your Cost of Living (or COL) is. Print out your bank statement from the previous month and go through each purchase individually. Afterall, no purchase is too small- $5.67 ubers can easily turn into a monthly $50+ spending habit that may be out of your desired budget. Highlight or mentally note and reflect upon each purchase that may not have been worth it. Reflecting on your previous money mistakes can help you grow in the future.
I understand it’s nearly impossible to know exactly what you’re going to have to spend every month, but it’s of the utmost importance to track your definite, unavoidable expenses to ensure you don’t stress about stretching the last $10 of your paycheck for far too long. To avoid doing so, take into account things like
-Food (whether it may be from a meal plan or out of pocket)
-Tuition
-Transportation (ubers, trains, cars)
-Lifestyle expenses (haircuts, fun luxuries, etc)
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Forgive Yourself: Just as it’s important to track your spending, it’s just as important to forgive and learn for the past purchases you’ve made in order to better your financial future. Yes, it’s hard to imagine what you could’ve spent on all those $4 iced coffees you bought, but it’s even more beneficial to use that aggravation as a source of inspiration for moving forward. Saving $4 a day and making your iced coffee at home adds up quickly.
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Drink Your Coffee At Home: As a continuation of my last point, if there’s one piece of advice to take from this, it’s buy a coffee maker. Making coffee at home saves the average DC coffee drinker $1,489 a year- nearly $6,000 over your four years of college!
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Adapt, Adapt, Adapt: I understand it’s nearly impossible to know exactly what you’re going to have to spend every month, so that’s why it is so important for you to learn and adapt when your income and spending habits change.
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Plan Ahead: While you’re thinking about spending habits, it is very important to look into savings as well. It’s never too soon to begin saving an emergency fund. Putting aside money never hurt anybody. An emergency fund can rescue you when you have an unexpected expense while in school, and the sooner you learn smart saving habits in college, the faster your money will grow in the future. Looking ahead and learning to not just live in the now is an important habit to acquire before you’ve even set foot into the real world. The earlier in your life you begin to save, the better off you’ll be in the long run.