I’ve been there and I get it – in college it’s easy to blow through what little money you have whether it be saved up from summer jobs or you work a part-time job on top of classes. As a part of the millennial generation FOMO is a common worry. But, take it from someone who was lucky enough to have parents teach her the power of budgeting and saving at a young age – and I mean really young age – there’s power in budgeting your money.
Now before you decide that this isn’t worth your time and stop reading just stop and think for a moment. Budgeting doesn’t have to mean cutting yourself off from going out and having fun with your friends, it just means scaling back. Instead of going out for dinner and drinks with the girls every Friday night find a way to bring it home (or to your dorm) and chip in on supplies as a group for a cheap and easy meal that you can eat in your pjs while watching whatever Netflix show you’re currently binge-watching and catching up on the latest campus happenings. While the setting may not be as fun and glamorous it’s more about the people you’re with is it not?
Of course that’s just one example and it varies depending your own personal habits. What I’m really trying to get at is that you can find cheaper ways to do the things that you love and save money. In the long run you’ll be thanking yourself.
Now you’re thinking, well maybe she has a point, but now that I’m thinking I should budget my money, how should I go about it? While this is just my system and you may find something else that works better for you I work with a 50/20/15/15 model.
In other words with any cash that I bring in (gifts excluded):
- 50% – student loans – take it from a recent graduate who has been saving since she was 16 and is currently working part-time jobs only, having that cash saved up is one less worry because even as I use it to start paying off my loans I keep putting more aside so that there I always have enough to make payments larger than required and still have some in reserve pending a money crisis.
- 20% – spending – this is for you to spend as you please – going out with friends, buying that new purse you were buying, a surprise trip to visit a friend at another university etc.
- 15% – rainy day money – this is meant to be used exactly as it’s titled, for those rainy days where some unexpected expense comes up that you need to pay, for instance new tires for your car or a laptop to replace the one you just spilled coffee all over. eventually, if you save enough you can always transfer a little over to your spending money, just make sure you keep enough for whatever emergencies crop up, this has saved my butt more than once.
- 15% – retirement – this is probably the last thing you’re really concerned with but it could be the difference between being able to retire when you’re 60 instead of 65 in the future. personally I have an account with Charles Schwab but I suggest you do the research, or even ask your parents for advice as I did, before making a decision.
Why is it that I’ve decided it might be time to share my budgeting with my fellow millennials? Because when I graduated this past spring it was a great feeling knowing that I had already had some money in the bank.
If you do decide to budget your money I highly suggest that you use a spreadsheet like Excel to help you keep track of what money you have going in and out of your account(s) and your totals.
Happy Savings! 💰