Money Management 101
Topic: Budget
After a rough week of classes, it's nice to be able to treat yourself to an uber into the city to grab a bite and catch a movie with friends, but $60 later, it hits you how expensive and unsustainable your habits are. Avoid this problem by establishing and sticking to a budget. It's easy to think to yourself that there is no need for a budget quite yet, but there's no time like now to start managing your money intelligently. Below is an example breakdown of where your money goes.
How many of those categories are accurate to you? Are there any areas you could cut back on? Even if you think you have a firm grip on your finances, emergencies can always come up and keeping a budget will not only keep you on track for the present, but also help you plan for the future.
I. What is a budget?
A budget is an established plan on how you will spend your money. Typically it lists income and expenses for a month.
II. Why should I care?
If you have never made a budget before it can be surprising where your money is going - and more importantly where it could go. You may find that if you just watch your spending on things like going out to eat and transportation, you can find room in your budget for bigger events like a Spring Break trip with friends, a concert at the Verizon Center, or an emergency money fund.
II. How do your create a budget?
You can begin your budgets with online tools such as mint.com, apps such as YNAB, excel spreadsheets or logging with pen and paper. Your budget should generally consist of any income (cash flow from work, financial aid refunds, and/or parental support) and expenses (what you spend money on including books/supplies, food, clothes, toiletries, entertainment, and transportation).
III. How should one monitor and adjust a budget?
The ultimate goal is to spend less than you make; if this is not the case for you, then you should consider adjusting your budget. Find areas that you can cut such as, eating out less, spending less on clothes, or visiting many of the free things to do in DMV. You can also look into boosting your income by taking on extra hours at work, given that you stay on top of school work.