This post was actually inspired by one of my friends. The subject of our conversation was how to effectively manage monthly budget as student. she pointed out how students struggle to make ends meet by the end of the month stress free.
The subject of our conversation was how to effectively manage monthly budget as student
Many say student life is one of the best stages in one’s life, but the fail to point out the limitations that come with it due to money. It’s not a news that most students are well, broke and that can make life difficult sometimes, unless you live in wonderland where things are free.
For the latter mentioned reasons, every student should consider mastering their finances.By doing so, you will positively impact your finances in the long-term.
You will also, have less money related stress, which is a great because student life itself can be very stressful sometimes.
I used to struggle with managing my money effectively on monthly basis. I used to get really broke a week before the end of the month. As a result, I will temporally change my lifestyle drastically. I will get obsessed with tracking my money, even down to the pennies. it’s still money, I’ll say to myself. Sounds familiar? Fast forward to the beginning of the month, you know what happened when I got money? Yep, you got it right, I will restart the cycle all over again and that was my life for many years.
At one point I got tired of it all. I realized taking control over my money was my responsibility and as a result I decided to take control over my spend habits.
Unfortunately my past reality is still a present reality for a lot a lot of students. That’s why I decided to write this article. In hopes that any student (or not) in this situation will learn a thing or two and will take actions after reading this.
Life becomes pleasantly peaceful when you don’t have to stress at the end of every month…Hakuna matata
If you want to dig more about me please check this article: https://willing2bewealthy.com/about/
Understand the difference between needs and wants
Do you know that many people struggle to draw a line between need and wants? Needs universally, are considered things we need to survive and thrive. Meaning shelter to live in, clothes to keep your body warm, food and water to maintain your health. Things that do not fall under this category are not needs, the are WANTS.
For example vitamin water, it’s not required for survival, but for some people it’s a need. I would like to stress the fact that everyone is different. For instance, for some people consider traveling as a necessity, but for others it is a luxury, a want.
Decide what is a need and what is a want for you
Not knowing the difference between your needs and wants might hold you back and prevent you from managing your money successfully. You are special and no one understand your need and wants better than you. It’s true that our perception of need and wants differ according to our background, upbringing and financial situation. For me personally, I consider working out with weight a need, so I own a gym membership. For many people this is not the case.
It is up to you to decide if:
– Buying a new cellphone every year is a need or a want.
– Saving a part of your income is a need or a want
– Spending your money at a coffee shop every day is a need for you
– Buying clothes every month and eating expensive meal at restaurants is a need or a want.
– Buying a new pair of Air Jordan sneakers and going to the Nightclub every Saturday is a need or a want
– Managing your monthly budget is a priority or not
TIP: You are the master of your financial future. Many things we consider as need might be considered as wants by others. That’s why it’s important to not compare yourself with others. Focus on you and your financial goals. After going through your needs and wants, try to implement this new information into your lifestyle. Learn to manage effectively your monthly budget.
Consider making a budget
Why you might wonder? Making a budget gives you a clear view of your finances. It shows you your total income aka how much money you get every month and where you spend it. It helps you manage your money effectively and as result, to reach your financial goals. Planning ahead before receiving your paycheck will prevent you from wasting your money on useless things. It might also help in the process of distinguish your needs and your wants.
So, after going through your spending habits and figuring out what you needs and wants are, making a budget is the logical next step. Write down your income and expenses. Take your time and try to write in details the things you will really need and want for the month. Be specific and write down things like : Your income for the month, how much you will spend on groceries, on dinning out, on your hygiene products, transportation, bills etc. Also, include hoe much you will want to save for the month.
Manage successfully your monthly budget as student
You don’t necessarily need a professional to make a budget for you. Thanks to th technology there are many free software and apps out there that can assist you. I personally use Excel, it’s basic and sharp. If you do need an App on the go on your cellphone, you might consider free Apps such as My Monthly Budget app, Budget book app and Budget Planner.
TIP: If you are not motivated or confident enough to make a budget yourself, feel free to contact a Financial planner to help you out. If you can’t afford the service, try to make it with a friend and have fun during the process.
If you want to know more about the best apps for budgeting please check this article: https://www.moneyunder30.com/best-budgeting-tools
Stick in your budget
Easier to say than done. Up to this day I still struggle a little bit with this one myself. Sometimes I end up spending more than I had budgeted for the month, life happens. However, I don’t let myself up for it. Instead I learn my lesson and strive to do better the next month. Also, don’t let short-term gratifications drive your decisions. Avoid impulse purchases as much as possible. Constantly picture your long-term goals, it will help you stay focus.
TIP: Be flexible and make budgeting fun. Sometimes you will not be able to stay on your budget and will over-spend. It’s called life, things happen and you should learn to be cool with it. Learn how to do better next time and don’t look for perfection. Usually, most people tend to spend more money in December (Christmas is coming) or during summer (Traveling). Budgeting has to be flexible, if not you will drive yourself mad.
Track your progress
Creating a personal is a good first step, but it’s also important that you track your progress. By doing this you’ll be able to notice your strengths and weaknesses. It’ll help you make any required adjustments.
TIP: Make time weekly to track your spending, so you can see if you are staying on track, if your budget is too strict or too loose. Make needed adjustments and keep improving along the journey.
Follow the 50,30,20 rule
What does the 50,30,20 stand for? I’ll start by explaining the background of this rule. In 2015. Massachussetts Democratic Senator Elizabeth Warren, who is now running for presidency in USA, and her daughter Amelia Warren Tyagi co-wrote “All your worth: The ultimate Lifetime Money Plan” a book that outlines six steps to eliminating your financial woes largely based on the 50,30,20 rule. According to Warren’s 50,30,20 rule, 50% of your income goes to your needs, such rent, utility bills and the like. 30% goes to your flexible spending such, shopping, traveling and eating out. The last 20% goes to your savings and debt payoff.
TIP: Even though the 50,30,20 rule is seen as one of the best formula out there when it comes to budgeting, feel free to adapt it according to your means and financial goals. Cook it in your own sauce and make it your own.
If you want to know more about Warren’s book, please check the link below https://www.amazon.com/gp/product/0743269888/ref=dbs_a_def_rwt_bibl_vppi_i2
If there is one thing I’ll like for you to retain from this post how to effectively manage monthly budget as student, that will be the importance of budgeting. Not only budgeting help you to have more control over your money, it’ll also hold accountable and discourage the habit of instant purchasing. As a result, it will help you save more money. You will also gain life changing habits such as self-discipline and paying yourself first.
Also, be flexible. Do your best to stay on your budget, but when you overspend don’t blame yourself too much for it. Learn from it and do better next time. If possible, adapt the 50,30,20 rule according to your financial situation and goals.
The last but not the least, do not cut out all your want at the very beginning. Avoid hardcore tendencies. Start slow and gain more momentum along the way.
If you want to dig more please check this article: https://willing2bewealthy.com/2019/09/06/4-ways-to-start-creating-wealth-for-students/
I hope you guys were inspired by this post. until then, stay healthy and grow wealthy.