Build A Budget That Works
By Buffie Alloway
Are you known as the thriftiest of your
friends? Do you always know how to have a
good time and spend as little money as
possible?
Back-to-School Budget
Before you know it, your fall semester will be
starting and you’ll be heading back to
campus. You’ll probably have a lot to do to
get ready...and that will probably cost you
some money. We have shared with you our
budget basics in hopes that you feel
empowered to take control of your money
and expenses when you head back to
school.
What's it worth to reduce my
spending?
By creating and maintaining a budget, you
can project how much you’ll need to save
and how much you can spend so that you
don't lose control of your finances. So, how
do you plan to build your Back-to-School
Budget?
How Much Am I Spending?
Current Budgeted Monthly Annual
Action to Take
Monthly Cost Monthly Cost Savings Savings
Eat fewer
restaurant meals
$160 $90 $70 $840
Give up
Manicures
$30 $0 $30 $360
Set clothing
allowance at $60 $110 $60 $50 $600
per month
Give up health
membership
$29 $0 $29 $348
Find lower auto
insurance rate
$140 $110 $30 $360
Cancel phone
extras—call $14 $0 $14 $168
waiting, caller ID
Cut Bank of
America credit $40 $20 $40 $240
card interest rate
Totals $523 $280 $243 $2916
Ways to save money—Cut backs
Gifts Frozen meals
Charitable contributions Compare supermarkets
Checks Buy generic
Get a free checking account Buy day-old bread
Magazines and books Buy in season
Swap services Don’t eat meat every night
Haircuts Brown bag it at work
Manicures/Massages Don’t buy what you don’t really
Cable television need
Phone extras Don’t jump into purchasing a
Movie rentals new car unless necessary
Dry Cleaning
Alcohol and tobacco products
Use coupons
Make a Realistic Plan
Take about one week to record ALL your
spending, then break down your spending
into categories like food, transportation,
wants, needs, etc. That way you can
estimate your spending more accurately.
Think about the kinds of foods you eat and
how much they cost. If you have a car, think
about how many miles you will be driving
while in college per month and calculate the
cost of gas.
Once you have made estimates for all your
monthly spending, organize the data into a
table/list that states the category name and
the amount of money you will spend on that
category each month. Keep in mind your
actual income and edit your budget so that
you don't exceed the amount of money
you have. (That step is pretty obvious)
A Lesson In Savings
Then, throughout the year, keep a copy of
the table in a place where it will be easy to
access like inside your planner/organizer, on
your desk, posted somewhere on a wall, or
wherever. And finally, keep track of your
spending as you go along to make sure that
you stick with your budget. It would be a
good idea to carry around a little notepad for
record keeping.
And before you buy something, always
think: Do I NEED this or is it just something
I WANT? Limit spending money on wants.
And most people don't think of this, but it's
good to put some money aside for
emergencies. You never know what could
happen. You may get sick or may have to
visit the doctor. Those things cost money,
too. This is a pretty foolproof way to manage
your money.
Play It Safe
With the planning of any budget you have to
establish how much money you are going
to be dealing with. From there you can
begin to place and categorize where that
money will go. If you are planning a monthly
budget, begin by putting money towards
the essentials.
Some essentials of college life are food,
tuition, housing, etc. Once the essentials are
taken care of, put your money towards
your needs. Yes, there is a difference
between essentials and needs). Some
needs of college life are car payments, gas,
bills, etc.
Once the essentials and needs are taken
care of see how much money is left over. It
is now time for wants. This category takes
SELF-DISAPLINE. You already know that
you should put some of your money towards
saving, paying back loans and those sort of
things. But I'm the first to admit that it is hard
to put money away when you want that CD
so bad or you have other desires.
Just use wisdom in dealing with your wants.
It's like an upside-down food pyramid. Deal
with your essentials first, then your needs,
and end with your wants. I have found this to
be one of the most effective ways to deal
with a budget.
Get Organized :-p
Knowing what you'll be spending your money
on is the first step to budgeting for it. The
largest and most predictable school
expenses should be at the top of your
budgeting list, ie tuition, books, lab fees,
lap top... This list should be combined with
your current (or future) expenses, such as
your rent, car note, gas...
Once you know how much you'll be spending
from month to month on the necessities you
can compare how much you're making with
how much you're spending and see what's
left over for the movies (or save it ;). Keep
this information on a chart half for your
income and half for expenses and don't
forget to save your receipts and write
everything on the chart. Hope this helps :)
Spread the Wealth
I would use something like a bulletin board to
make a noticeable place for my monthly
budget chart. Needs books would dominate
the top of the budget chart. I would then put
wants on the bottom of the page only to be
supplied when the needs are funded. Once
my budget gets going, I can change it to
better serve my new school goals.
I would check my bank accounts every
month making sure my budget proves
successful. If I am lagging on money, I would
cut finances for a want and use the money
to replace the account's loss. Nobody
wants to be low on cash because of having
too many hamburgers at McDonald's.
The Savings account is important to have
growing at a continual rate. If I were to have
money left over from a need, then it would go
into savings.
You don't need to be the king of Persia
spending all of your money.
Questions