If you’ve recently taken the plunge and started college, you’ve just entered the realm of your money needing to cover more than just your social life. However, if you don’t manage your money right, it could mean no food, fancy clothes or even fun. At least until you get your next payday/grant day/allowance comes in.
To create a budget, the very first thing you need to do is look at how much money you have right now. Next, work out when you will be getting more. Then decide what things you ‘have to’ pay for (like food) and what things you ‘want to’ pay for (like clothing) between now and then. Both will have to come from the money you have in your account now.
Keep this simple, take out your phone and use notes. The top heading should be the ‘have to’ stuff. Make a list of all the things that you just won’t survive without - travel to college, food, rent etc. Then allocate some of the money you have in your account today to cover these things off.
Move any money you have left to the ‘want to’ list. Stick things like nights out, cinema, take-aways on this list. Again, make sure you allocate money to each item.
By the end of this process, if you can’t see how you can afford to do all the things on the list, then there’s an important lesson to learn from all this. You know what it is – it’s that you can’t afford to do them all. But you now know that. So, what you need to do is prioritise. Look to see if you can shave stuff off the grocery shopping. Can you get a take-away instead of eating out? Or better still, can you eat at home?
By prioritising how you are planning on spending your money in advance, you avoid the need to worry about things you have to pay for. You also ensure you get to eat all the way up to the next time money is going to land in your account. And, because you find out in advance what you can’t afford to do, you get to make decisions in advance of what to leave out.
The Nutshell:
- Identify what you want to spend money on and what you need to spend money on.
- Give every euro you have right now a job.
- Accept life happens and when it does, just adjust how you planned on spending.
- Cutting back a little of lots of things, is much easier than cutting a lot from one thing.
If you can master this, you get to control your money, instead of it controlling you.
