Money can be a stressful subject, and budgeting is a great way to plan out your finances and be confident that you are on the right path. Although there are major events that require financial knowledge, daily transactions are just as important! Somethings to keep in mind when starting the budgeting process:
Overestimate Your Expenses
- It is always better to underspend and end up with a surplus than be short on cash
Underestimate Your Income
- It is better to underspend it is also better to underestimate your income and end up with more cash on hand
Involve Those Who Are Involved in Your Finances
- Discuss how much financial help others will give to you and how financial decisions will be made when they involve them
Prepare for the Unexpected by Setting Savings Goals
- Include savings as a recurring expense item in your budget
Differentiating Between Wants and Needs
- One benefit of budgeting is it helps you determine if you have the ability to spend on the items you want versus those you need.
Managing Your Budget
Record Your Actual Expenses
- Remember to keep track of both small and large expenses as the small ones are often forgotten but then later add up
Organize Your Records
- Decide what system you are going to use to record your expenses. There are many different ways to track your expenses such as apps on your phone, computer based programs or simply with pen and paper. Once you have decided on a method stick to it!
Create a Routine
- Manage your money on a regular basis as well as record both your income and expenses. Choose how often you want to record your expenses and stick to the routine.
Include a Category for “Unusual” Expenses
- Not all expenses will fit evenly into a category in your budget so create a category for unusual or unexpected expenses.
Review Your Spending for Little Items that Add Up to Big Monthly Expenses
- Small purchases will add up, especially if you make the same small purchase regularly, like a cup of coffee every day. If you want to save more money look at your regular small purchases to see if you can make changes to save more like making your coffee at home or packing your own lunch.
Make Your Financial Aid Credit Balance Refund Last
- Remember that this is supposed to last you the whole semester and try to spread out your use of it throughout the semester.
- If you can try to comparison shop before you make purchases to see if you can save money on purchases by buying them at a lower cost from another provider.
Use Credit Cards Wisely
- Do not spend more than you can afford to pay in full on a monthly basis on your credit card. Also, limit the number of credit cards you get as multiple are not necessary if spending responsibly.