High school taught me many things: the format of a Shakespearean sonnet, the function of chloroplasts and even how to square dance. One very important topic that was somehow left out of my entire teenage education was how to budget during college. This realization dawned on me last summer as I drafted up a shopping list of what I would need in my freshman year dorm. I stared at the bullet points on my Google Doc and was suddenly hit with the understanding that soon I’d be responsible for buying my own household items. In college, I’d need to plan out my purchases and take responsibility for my finances. This prospect felt daunting, to say the least.
Now, the pandemic has ensured that I never actually arrived at my freshman dorm, but the necessity of becoming financially aware has not disappeared. I’ve dedicated plenty of time throughout lockdown to learning some basics about money. I got my first debit card, watched YouTube videos on investment tips and most importantly, began logging my monthly spending. The act of writing down what you buy may seem too obvious or too small of a step to take towards sorting out your finances; however, I’ve learned that getting an honest idea of your spending habits is the best way to begin budgeting.
Starting in August, I built up the habit of inputting my purchases and income sources into a basic spreadsheet. I forced myself to be scrupulously thorough with my entries. Each to-go matcha latte was tallied into my total costs, and I carefully included all of my monthly entertainment expenses, like my Spotify subscription. By tracking every dollar in and every dollar out during this school year, I’ve accumulated enough data to get a good, hard look at where my money goes. One of the biggest trends that I’ve observed from month to month is the disproportionate amount of cash that goes to ordering food. If I didn’t have my spreadsheet to check myself, I’d have wildly underestimated how much of my income is eaten up by my to-go eating. Veggie burgers and boba drinks don’t seem like they’d add up, but they 100% do! The other major theme in my spending is not being frugal enough with beauty related purchases. For example, my data for the whole month of December was bloated by a trip to the hair salon which nearly doubled my expenditures. I don’t expect my spending on campus next year to exactly mirror these mid-pandemic costs (I won’t be ordering restaurant food as often or requiring emergency appointments to remedy at-home haircut disasters), but I can still make some important takeaways.
I’ve learned three major lessons from my logging experiment. Firstly, the simple act of having to write a cost down is often enough to deter me from whipping out my debit card. There is some psychological device that activates to curb my spending when I know that I’ll have to hold myself accountable for my purchases. I haven’t found myself caving to Sephora’s tantalizing promotional emails or buying overpriced hardcover books since I’ve picked up my tracking habit. Secondly, I’ve realized that when I have a ballpark idea of my disposable income, I feel more empowered to act generously. Being able to see on my spreadsheet when I have a bit more money to spare compared to the previous month has compelled me to make more small donations and save up to buy my loved ones nicer birthday presents. Thirdly, my spreadsheet has helped me decide on what budgeting system I should employ for the rest of college. I’ve assessed my routines and recognized that the popular 50/30/20 rule will probably work best for me. As I enter my sophomore year, I will loosely make sure that I spend 50% of my money on needs, 30% on wants and 20% on savings. This framework is close enough to my actual spending habits that it shouldn’t be too hard to adopt, but it also provides much needed structure which will help me begin developing some emergency savings.
I’m excited to transition my rudimentary budgeting system into more complex financial records and continue to learn about how to be responsible with my money. It seems to me like many young women, in particular, are kept in the dark as to how to organize their accounts and build healthy spending habits, so I’ve dedicated myself to staying informed. I’m currently researching more beginner budgeting techniques through watching videos on The Financial Diet YouTube channel and engaging with sites like Her First 100k. Hopefully, the habits that I build now will help me avoid the pitfalls of uncontrolled spending and unnecessary debt down the road in my college career. High school might not have taught me about financial planning, but I’m taking matters into my own hands!
If you’re feeling overwhelmed by the prospect of managing your own finances as a new college student, I totally recommend diving in with my first step of tracking your expenses. It’s relatively quick and easy, and if you’re not a spreadsheet gal like me, there’s even a host of budgeting apps that can help you with this step. Learning about money can seem intimidating, but it doesn’t have to be. Start with assessing your lifestyle, then from there you can grow your confidence and understanding.