For many of you, your first year at university is the first time you really have to manage your own money in any significant fashion. Before this you were likely still living under your parents’ roof, enjoying the shelter they provided, and eating the food they bought. Now all of that is placed squarely on your shoulders and you’re feeling a little overwhelmed! Or worse – you don’t feel overwhelmed at all because you are completely oblivious as to where your money is going. Never fear – I’m here to help.
I should start by saying that I’m no expert on money management. I’m just an experienced student who has managed to get a better handle on his own money over time, and I want to help you do the same. It only takes a few simple steps to keep better track of your money, and you may find that you’ll even have more of it left over at the end of the day!
With a new month about to begin, these are a few steps that you can take for a fresh start in October. Remember, I’m in no way qualified to advise you in your financial matters. But these are a few easy steps that make a world of difference for me, and I hope they can help you too!
Step one: Write it down
Every time you make a purchase, write it down. I cannot stress the importance of this step enough. Obviously it is essential in allowing you to know where your money is going, but after a couple of months you will start to see which purchases are really necessary and where you can cut back. If you know how to use a spreadsheet program like Microsoft Excel, it can make record-keeping super easy. If not, the good old pen-and-paper method works just fine. Just write down EVERYTHING – make it a point to review your purchases at the end of every day (it helps if you keep the receipts!).
Step two: Make it balance
Categorize your spending into sections like “Groceries,” “Entertainment,” “Eating out,” and “Transportation.” Also be sure to include fixed monthly expenses like rent and cell phone. At the end of the month, you will have a good idea of your monthly total costs. Now figure out how much you make per month (plus student loan, if applicable). It goes without saying that if your costs outweigh your income, you’re on the fast-track to being out of money. If that’s the case, you either need to find a way to make more money or find ways to cut spending, which brings us to step three.
Step three: Cut Spending
I could write a whole series of blog posts on this topic (and in fact, I think I will!). But I’m sure you can already think of plenty of ways to cut spending on your own: make your own food rather than ordering pizza, get the cheap brand at the grocery store, or walk to school instead of drive. Simply following step one can even act as a deterrent for excessive spending: if you know you have to see that red ink at the end of the day, you may be less likely to make that impulse buy at the checkout counter. Look out for more of my cost-saving tips for students in a future blog post. But in the mean time, enjoy taking control of your money!