Are you one of those students that find themselves in situations where they seem not to have enough money for the things they need and the things that are important to them? then you need a budget and not just a budget, a practical one that best fits you.
Budgeting allows you to create a spending plan for your money and being disciplined as a student to follow a budget or a spending plan will also keep you out of debt or help you work your way out of debt if you are currently in debt.
SEE ALSO The Secret to Paying Off Debt and Still Having Some Money Left
A budget is a plan for managing your money in a way that best meets your personal needs and wants.
WHAT IS IN A BUDGET?
- INCOME
Simply any money earned, given as allowance from parents, guardian or relatives
- EXPENSES
Money that you spend, this includes anything you purchase. This includes both planned and unexpected expenses. The income must equal the expenses. If you make or get, you must have a ‘destination ‘for that money!
That does NOT mean you MUST SPEND it. Planning to put money in some type of savings account is a GREAT idea. The Income MUST EQUAL Expenses!!
SEE ALSO: Track Your Spending By Using the ENVELOPE BUDGET SYSTEM
Budgets rock! With a budget, spending doesn’t have to be a constant guessing game. It’s worth putting in the time to create one. When you know exactly how much money you have to work with, you can make smarter spending choices. Let’s consider 4 steps to making a practical budget!
- Know your limits: How much money do you have to spend each month? To really answer this question, you’ll need to take all your income sources into account. How much is your monthly allowance? Do you get any money from your parents, guardian or relatives? Are you receiving financial aid for school? Do you earn income from elsewhere?
- Know your habits: Many people try to create new spending habits without understanding the habits they already have. Don’t get ahead of yourself. How much are you spending on transportation, food, Shoes and accessories? Next, add up your average monthly total and compare it to your monthly spending limit. If you’re spending more money than you have coming in, it’s time to cut back.
- Plan: Plan for the next month’s expenses and income so you don’t get taken by surprise, make sure to list out everything that is important to you and that you need to purchase and align it with the income you should get in the coming month from friends, families and loved ones even your teacher friend if you do have one.
- Look for ways to spend less: Small savings can add up to a lot of money. Adding one small saving at a time to your budget can surprise you with how much extra money you’ve accumulated.
I assure you that you can get the best of your money if you practice what I outlined here and a few thoughts from Bank of America. Cheers!
