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Financial Literacy Cougar Money Matters

Budgeting

Think of your budget as a strategy you devise in order to achieve the things you need and want today while becoming intentional with similar future desires and achievements. There are several different elements to a budget, including your income, savings, expenses and budget design. In organizing a budget, or spending plan, here are some goals to keep in mind:

  1. Identify the main components, as just described.
  2. Consider how income and savings can dictate your expenses, not the other way around.
  3. Define and design a spending plan that works for you.
  4. Set realistic goals and continually analyze/adjust your plan to develop methods to incorporate your plan.

Tips:

~Overestimate your expenses. It’s easy to exceed the limit you have set for yourself, even if it’s just a few dollars. Over time, this could add up or your mindset may shift to believe that it’s not a big deal to spend more than you’ve planned. Then all of a sudden you’re wondering where your money went and why you’re not on target. Overestimating what you spend can also leave room to put your potential “leftover” money into savings, or treat yourself. It’s not a guarantee that this will happen, but it’s always better to have more money than you expected than to have less.

~Underestimate your income. Along with overestimating your expenses, this could give you more options on what to do with your money. Perhaps you get a raise, you came in an hour early to work, or someone even decided to gift you with a coupon – now you’ve earned money that you didn’t expect to have, which in turn can be sorted into other categories of your plan.

~Prepare for the unexpected. You never know when something will poke into your budget to steal some money and try to ruin your spending plan. If you set aside money for emergencies such as a doctor’s visit, broken windshield wipers, or a sudden necessity for school or office supplies, you can still sit comfortably knowing you won’t overspend your money for the time being.

Managing Your Budget

Keeping track of your budget can be a lot of work if you don’t organize it well. Consider the following tips to ease the intimidation you may feel when it comes to maintaining your spending plan.

    • Record your actual expenses. This will allow you to look back at what you spent, which is especially helpful if you’re looking to cut down on how much you’re spending.
    • Organize your records. There are many tools to categorize and track what you’re doing with your money, including mobile applications and Excel sheets.
    • Create a routine. If you don’t regularly record your data, it will be easy to get lost in where your money went and when. Weekly assessments is a good timeline to start with if you’re unsure; this should be ample enough so that you don’t forget when and where you spent your money. Remember, it will be different for everyone depending on their schedule. Setting a reminder on your phone or desktop is a helpful accountability tool, or telling others whom you see regularly about your plan so that they can help remind you to keep track.
    • Use an “unusual” category. Not all of your expenses will fit into your previously defined categories. This category includes those occasional expenses. Adding a note to explain deeper what that expense was may be useful.
    • Share your expenses. If you have roommates, discuss a way to split household and other shared essentials to help save money in a way that benefits everyone involved.
    • Little items make a big impact. Is there anything that you tend to buy regularly, knowing it only costs a few bucks? Consider a regular $4 expense, say, every other day for a month. This adds up to $60 in expenses that month. Was it really worth it? Did you really need it? If you find yourself in a similar situation, consider decreasing the regularity of this expense such as – in this example – from every other day to every three days. It may not seem like much, but it’s a start; it also saves you $20 in one month.
    • Make your financial aid credit balance refund last. If your school applies your financial aid towards your tuition and fees and there is money left over, your school will refund that money to you so that you can use it for other academic purposes such as textbooks and transportation. Try to make this money last throughout the semester instead of spending it all right away by dividing it evenly and splitting it into intervals as though it were a smaller, regular income.
    • Comparison shop. Compare prices at different resources for the same product so you don’t spend an unnecessary amount of money. As tedious as it may feel at first, you may see significant results over time after creating a habit of doing this.
    • Use credit cards wisely. Do you really need a credit cart, or would another payment option work just as well? If you already have one, don’t spend more on it than you can afford to pay in full on a monthly basis. This will help you establish a solid credit rating and avoid financial problems.

The Washington State Department of Financial Institutions’ free “Right on the Money” booklet is a quick-start guide to personal finance for college students. Budgeting, debit, credit, and savings are all discussed. As well as some pointers on how to keep your debt to a minimum. Order a free booklet today or view it online in PDF format.

Additional Information and Resources