"Why do I need to budget?"
Budgeting is essential to everyone, but especially to college students. To ensure your financial stability, you need to start managing your money right away! If you neglect to manage your money now, it'll only be harder in the future. To increase your savings and avoid future debt, begin today. In this article, we'll teach you how to manage your money like a pro!
Fixed vs. Variable Expenses
What's the difference, and why does it matter?
A Fixed Expense is a reoccurring cost of which the amount never changes. You will pay these expenses regularly (weekly, monthly, quarterly, or yearly). Because they cost the same every month, fixed expenses are easy to budget! Examples of fixed expenses for college students include Housing, Books, Utilities, & Transportation.
A Variable Expense is a potential cost that differs depending on your personal spending decisions. Unlike fixed expenses, variable expenses can fluctuate each month; this can make budgeting a little tricky. Examples of variable expenses in college include Dining out, Childcare, Entertainment, Medical/Health, Clothing, Laundry, & Groceries.
Identifying unnecessary purchases
Is it worth it?
Many shiny, new, exciting products catch our attention from time to time, but are they worth the money? Impulse buys, and other unnecessary purchases, can make or break your budget. To save yourself and your bank account, here are four questions to ask yourself before purchasing anything outside of your budget.
Can you buy it three times? If you don't have enough to make the purchase three times, then you can't afford it.
Is this a want or a need? Determine whether or not this item is for your satisfaction or an actual purpose. Try your best to limit yourself to only one small "Want" a week and one large "Want" a month.
Will I still want/need this in a week? A lot of impulse buys are for convenience, and often aren't beneficial in the long run! If you are having a hard time deciding whether or not a purchase is necessary, give it a week to think about it!
How will this purchase benefit my life? If you have convinced yourself that you NEED something outside of your budget, write a list of pros and cons. When looking them over, see if the pros realistically outweigh the cost and the price.
Budgeting Tips for College
• Buy used textbooks!
• Take advantage of student discounts!
• Cancel memberships!
• Instead of dining out, make dinner at home or use your student meal card!
• Limit extra purchases!
• Sell unwanted items!
• Get a credit card and begin establishing credit!
• 50 / 20 / 30 • divide after-tax income, spending 50% on needs, 30% on wants, and 20% into savings.
Ready to build your own budget? Check out How to Create Your Budget.
For more interesting and helpful articles for college students check out our College Life blog!