University comes with a lot of new experiences: you’re young and ready to have some fun, you might be living away from home for the first time, and tuition and books are probably making quite a dent in your bank account. Budgeting is difficult even when you aren’t spending your work week paying thousands to attend university, and sticking to a budget is a whole other story. Prioritizing your spending is essential for not only meeting your basic needs, but also balancing your academic and social lives. With a few simple steps, you will be budgeting like a boss, and living comfortably.
What Are You Bringing In?
The first and most important step to building your budget is taking a look at your income. Unfortunately, you can’t spend money that you don’t have. Start by looking at all of your sources of income, and when you are receiving the money, then total up your income for the month.
One Time, Big-Ticket Expenses
Different times of year come with different mandatory expenses. Make sure that you factor in your tuition, book costs, and club dues in September when school is starting. November and December might be heavy spending months as you prepare for the Holiday season. Perhaps you have a trip planned in March and you have to pay for your flights by mid-February. Ensure that you make room in your budget right away for any big and uncommon expenses.
Recurring Expenses (A.K.A. The Boring Stuff)
Toilet paper, tampons, lettuce, laundry detergent… the list of small necessities goes on and on. The third step in budgeting is making sure that you can pay rent in full and on time, ensure that the utilities are paid so that you don’t have to shower at the gym, and that you eat more than instant ramen. Make room in your budget for your recurring monthly and weekly costs.
Save, Save, Save
You have now paid for your much needed new laptop, rent is paid, and the fridge is freshly stocked- you may begin to think “Woohoo, time to go shopping,” but there is one more step in budgeting before you get to pick up those jeans you’ve been eyeing for weeks. Starting the habit of saving money is important at any and every stage of life, but the earlier you start saving, the easier it will be. Most financial institutions allow you to automatically transfer a certain amount from your chequing account to your savings account on a scheduled basis (daily, weekly, monthly, etc). Try setting up automatic transfers, put $10 a week into savings, or take 10-20% of each pay cheque and save it. Saving money is an excellent practice and many savings accounts will pay you interest just for keeping your money in them. Trust me, you likely aren’t going to miss $15 a week, but it sure will add up fast!
Everything Else
Once you’ve figured out how much of your paycheque your needs and mandatory expenditures will eat up, you can take a look at how much money you have left over. This leftover budget is for your wants, not your needs. Start with events or plans that you have with friends and factor those costs in. Add a small budget for shopping (if there is room), and have some cash to treat yourself for budgeting so well. Make sure that you allot yourself a specific amount for entertainment, and do not spend more than you’ve planned to.
Those Last Few Dollars
While it is important to plan for the things you need, it is not necessary to have a plan for every cent that comes into your bank account. Once you have made your budget (and you are sticking to it) any additional income that you might have is a cushion. Perhaps add some of it to savings, or keep it in your chequing account in case of an emergency. You never know when a semi-truck might send a rock flying at your windshield -we do live in Alberta after all- and having a cushion for those unexpected costs will save you from having to dip into your savings to replace your windshield.
Tips and Tricks
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If you see something online or in store that you don’t need, but you really want, make yourself wait. Select a set amount of time to wait before you make the purchase in order to see how important the item would be to you. If those shoes are still calling your name after thinking about them for a week, and there is room in your budget, then you go get those shoes.
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Focus on your needs rather than your wants. Minimalism has been growing in popularity and many people are saying that having less stuff is the key to living more happy and full lives- try it out!
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Pay for quality! It will likely save you more money in the long run if you spend a little more on a quality item, than if you choose the cheaper alternative and have to replace it.
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Raise your hand if you have ever found something in your junk drawer that you forgot you had. Take a look around your space before making a purchase to see if you have anything similar, or something that could work as an alternative. Who knows, you might even have the exact thing you need tucked away in a cupboard, forgotten.
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Stick to your list. Make a shopping list or a grocery list and stick to it! Meal plan and buy only what you need. That way food will not go to waste and you will not waste money eating out.