Budgeting 101: Where to Start

As a college student, the topic of personal finances can cause a bit of stress in your life, especially when you’re financially independent from your parents. Everyone has it differently, but no matter where you are at, consider implementing a budget into your college lifestyle. Knowing how to manage your money early on will do nothing but benefit you in the future. 

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Before you start restricting or overspending, the best thing you can do is create a form that will track your income and expenses. It’s crucial to list out all of your streams of income, as well as account for your spendings, such as rent, groceries, and all of the miscellaneous purchases. Having a visual representation can really break it down and make the process of budgeting simpler. Using an Excel sheet is the perfect place to start. At the end of every month, go through your bank statements and receipts to make sure everything is accounted for. It wasn’t until I started doing this that I realized how much I waste on little purchases, like grabbing a drink at the gas station, or how much I spend on trendy clothes. This gives you the potential to reevaluate where you should be putting your money. 

 

The next step I would suggest is making sure to put aside money for emergencies. One of the biggest struggles I face is putting money into a savings account, but it is so important. There is a common rule that is known as the 50/30/20 budget. In simpler terms, it’s suggesting that 50% of your income goes towards necessities such as rent, utilities, insurance, etc. After that, 30% goes toward your wants, which in college could be supporting your social life by eating out or spicing up your wardrobe. Lastly, 20% should be put away for savings. This is a good baseline to follow, but if you’re able to put more into savings, you will create more security for yourself. 

 

There are also many small tips and tricks you can use that will gradually make a big difference. Comparing prices when grocery shopping will save you a lot each time you shop. I tend to gravitate toward name brands because they are more recognizable, but most of the time store brands offer the same product for much less. It’s also worthwhile to make sure you are a member at any of your local shops to ensure you are receiving the best deals when checking out. These little differences are often looked past, but the small difference of saving twenty-five cents adds up.

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Lastly, circling back to savings, many financial experts recommend setting future aspirations. As a senior in college, I have a personal goal of moving out of the state and living on my own, rather than going back to my parents’ house. I always try to keep this in mind when I’m spending money because if I can avoid making mistakes, I can put that money toward my future rent. In the last year, I opened a separate account at my bank in which I put money for after college, rather than grouping that directly with my money in my savings account.

Although these are very small budgeting steps, they are necessary when dealing with your personal finances. You will never regret being mindful with your money—your future self will thank you later.

 

-Isabelle

 

Edited by: Alicia Tebeau-Sherry