This semester, I am taking a course called Investing for Your Future. This course teaches students who may describe themselves as financially illiterate about the importance of budgeting and investing. Budgeting in our early years of adulthood might seem unpleasant, but it is a beneficial habit to start before we graduate college and begin our “big boy” and “big girl” jobs. Here are some tips I learned.
Track your spending
Monitor how much you spend each month through Excel, Google Sheets or the Apple Notes app. The Mint app is another great tool to track spending, as it helps users build credit and set financial goals. Seeing the results on how much you spend each month is sometimes scary, but it reveals where your money goes and tells you ways you can improve to maintain healthy spending habits.
Create spending categories for a monthly budget
These categories should be based on what you spend money on each month. Examples include eating out, groceries, rent, car payments, clothing and more. Each month, decide how much you want to spend in each category and track your spending that entire month. It’s okay if your budget varies each month since different expenses come up throughout the year. Making spending categories should not always be considered a punishment because it can make you feel better about your saving habits. Maybe one month, you spend less money than expected in a certain category, so you have more money saved for later.
Keep track of your paychecks
Many college students have part-time jobs, so it’s wise to see how much of your paycheck gets spent each month. If you have direct deposit, seeing how much is in a paycheck is very easy, and you should strive to put away a portion of your paycheck into savings. This habit will let you know if you can splurge during an upcoming month, or if you have to spend less money another month.
With these three tips, budgeting will become significantly less difficult. Saving money is rewarding, but don’t be too hard on yourself if you spend more than you planned. Increasing your savings even by a little is an achievement. If budgeting begins to seem like a punishment, remember that you are establishing healthy habits now so you can invest for your future.
– Angela Tessitore, Account Associate