Learn to manage a budget in college to form good future financial habits

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Budgeting is a key essential in saving money. Learning to have a budget in college is important because it prepares students for “real life” skills outside of school.

A budget is a plan to save increments of money for a certain period of time. An example of this would be putting away $200 each month for an upcoming trip, or $20 a week specifically towards one’s desired entertainment.

This is helpful to everyone because it provides a bases to how much they can or can’t spend. Being in college, it may seem difficult for some students to handle their money on their own and figure out what money can go towards each area that it needs to go, this is where a budget becomes useful.

The article “Reasons why you Should Budget Your Money”, discussed why budgeting is an essential life skill for everyone.

“If you feel like you are not in control of your money and you are constantly wondering where it went and what happened to it, budgeting can put you in control,” stated thebalance.com. “It allows you to prioritize your spending, track how you are doing and realize when you need to stop. It puts a solid plan into place that is easy to flow and gives you the chance to plan and prepare for the future.”

A budget can be used in many different ways. Some people may prefer to have an Excel sheet to keep track of their financial plan, or even just writing it down on a notepad, to-do list or journal. It should be kept in a place that can be easily accessed and won’t be forgotten.

 

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The first step in creating a budget is to figure out the number of expenses that will be needed. Typically, people add up the amount of expenses for a month’s worth of a budget. However, it can also go by weeks, months, and possibly years if desired. Common factors that go into a budget can be a car note, insurance, grocery expenses, gas, and extra spending money.

The income one makes per month should also be taken into consideration. Once the factors that need to be budgeted are constructed, then it is time to calculate the savings that will be made for the month. The best way to figure this out is to look at past bills and income received from previous months. This just provides accuracy to the amount of money that will be needed to budget each expense.

Once each expense is listed and the money that will be made each month is figured out, then a person will be able to put together how much money can specifically go to each. It is best to determine which expenses may be more important than others, considering these will be the ones that money will go to first. Once each essential expense is budgeted, then there should be leftover money for things that are considered non-essential such as free-time activities.

This allows one to be able to visualize what their earnings will go towards and be able to have a guideline of what is needed to be budgeted. It also may help one to stop over-spending, a common problem for many college students.

When having a budget, it is also very important to save money. Having a tight budget, where one is restricted or limited to the amount fo expenses money can go towards, can be very straining. It may also be helpful to save for long term investments over a period of time.

Budgeting can be used as a plan for many students to have a better grip on their spending habits and to keep track of a financial plan.

 

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