How to Create a Flexible Budget that Fits Your Lifestyle

If you’re like me, tracking your finances is a foreign concept to you. You’d like to be more proactive with your money, but you constantly find yourself swiping your debit card and praying you don’t overdraw your account.

Okay maybe your situation isn’t that dramatic, but I would argue many students have no clue how to successfully manage their money. Budgeting is one of those adult tasks no one ever teaches you about, so it seems daunting, especially when you think of how much cutting back on expenses will limit you. However, being better with your finances does not mean spending way less by sacrificing opportunities and experiences. It means understanding where your money is coming from and going to, then shaping your spending habits to fit into your lifestyle.

Image Via Reddit

So you’re stuck in this endless loop of impulsively buying things you don't need then constantly complaining about being broke. Instead of spending hours devising a strict, over-complicated budget, opt for a more flexible one that acts as a guide for your spending.

Start by taking a hard look at your monthly statements to find a clear picture of where your money is going. Brace yourself, this is the hardest part. Look at spending habits and trends in your statements, because chances are you’re making more purchases in some categories than you think you are. Once you identify what is draining your account, slowly start cutting back on your expenses. For example, if you know you spend 30 dollars a week on grabbing iced coffee before class, don’t immediately resolve to never walk into a Starbucks again. That’s being completely unrealistic and setting yourself up for failure. Rather than go into a lifestyle shock and walk into class like a zombie every morning, take a two-step approach to combat the problematic spending habit you’ve developed:

  1. Trim your expenses gradually, you can go one day less a week without Starbucks and opt for some instant coffee before class. When you do get your coffee, you can even downgrade your venti cup to a grande and save a few bucks there.
  2. Cut back in areas that are easier to live without. If you know you absolutely need to be spending that money on your morning cup of coffee, look to other spending categories that you can more easily decrease. Maybe you went a little crazy last month on buying clothes, and you can live without going to the mall for the next few weeks.

As hard as it is, being completely honest with yourself about how you spend your money is what differentiates a successful budget from one that backfires. Once you’ve successfully started saving money, re-evaluate the areas of your budget that need improvement and set small financial goals you can work towards. Look back at the impulsive buys you’ve made and compare them to the money you felt was well spent. Your flexible budget should make sense within your lifestyle and financial goals, so re-evaluate and revise as necessary.

Image Via Beamly

Getting into the habit of tracking your spending early will set you up for financial success long beyond college. Take the time to make a meaningful budget that will end your constant worrying about money and help you take control of your finances.