One of the most crucial parts of moving out of your hometown to college and becoming an adult is ensuring that you are budgeting your money properly. You want to make sure that you don’t overspend and save as much as you possibly can, especially in case of emergencies. So, here are some ways that you can start budgeting your money in college.
Breakdown your total income
Whether it’s from work, the government, or your family, make sure that you understand the amount of money that is flowing into your bank account each month. Take some time to break down the total income and keep track of it on a month-to-month basis to make sure that you are getting the right amount of money in your account, especially if you are accepting college loans, scholarships, or grants.
Open a savings account
One of the most important parts of creating a budget in the first place is saving your money. At least 20% of your income should be saved each month as the money should be reserved solely for future use or emergency purposes. This money should be kept in a separate savings account, so that you do not confuse it with your spending money which should be in your checking account. Make sure to do your research on possible bank options before opening a savings account and doing so will only help you in the long run.
Create a spreadsheet
You should create a master finance spreadsheet to keep track of your weekly income and spending. Within the spreadsheet, create a page for each month of the year so that you can easily keep track of your monthly expenses.
Keep track and categorize your spending
You can keep track of your spending through your bank’s mobile app. If you have an Ellis Money account then you can easily go onto the Ellis app to find your list of transactions. Moreover, you should categorize your spending into fixed and variable expenses. You can easily figure out which expenses are fixed or variable by thinking about whether you need to pay for it or if it’s just an add-on that you do not need. For example, you cannot avoid paying rent and electricity bills (fixed expense) but you may not need to buy a new outfit or more snacks (variable expense).
Create a budget
Make sure that you know how much you can spend on a daily, weekly, and monthly basis. This means that you have to create a budget that you can easily follow. This should be a part of your spreadsheet and you should follow it as best as you can. It’s okay to struggle with this, but if you cannot strictly follow the budget that you’ve set for yourself then you should adjust it to what you feel comfortable or cut other unnecessary expenses.