Friday, June 1, 2012

Budgeting Basics


Alex Newby, Marketing Intern 

I’ve always had the typical college kid mindset. When money is tight and bills are due, I can buckle down and eat ramen for every meal but when I feel like I have a few dollars to spare, I immediately head out to spend it. As part of my list of New Year’s resolutions this past winter, I promised myself to be a better steward of the money I was making. 6 months later, not much has changed. So, in preparation for my senior year at UK, I’ve made it my summer goal to create and follow a budget. As I begin my journey to summer savings, I’ve compiled a list of tips and ideas that I hope will guide me (and you!)  through what could be a tough transition.
First, many budgeting gurus suggest that you begin by making a list of your income and monthly expenses. The more detailed the list is, the better you’ll be able to actually stick with your budget. For me, this part’s a little tricky. As a server, there are times when my cash flow isn’t steady or I end up not tracking the cash that I make. This leads to many weeks where I can’t figure out where my money must have gone!  To battle this, many websites suggest buying a notebook to record everything that goes in or out of your pocket. Luckily, I have a bank account that tracks this kind of information for me that tells me where and when I spend the most money. If you aren’t a pencil or paper kind of person, there’s also an iPhone app called “Pennies” that essentially does the same thing. Either way, you can’t save money without knowing how much you actually have and how much you are spending.
Once you have this list and have been tracking it for a few weeks, the next step is to start making sure the numbers add up. If you are spending more than you’re making and have to scrape by every month, then you’ll be able to see that and change things. One of the best websites I found when trying to make my own budget was beingfrugal.net because it had TONS of suggestions for practical ways to help save a few dollars.

Here are a few of my favorites:
-       -  Brew your own coffee
-        - Cook at home instead of eating out
-        - Only withdraw money from your bank to avoid ATM fees
-        - Buy in Bulk
-        - Bike or Ride the Bus instead of driving (Read Katie’s story on taking the bus here)
-        - Cook with Friends and assign each person to buy one ingredient
-        - Sign up for Groupon or Living Social to get daily deals (but be careful how many you buy!)
-        - Save Coupons (Remember Amanda’s story on couponing?
-       -  Throw all spare change into a jar

Learning the differences between needs and wants is also something that will help you save a few bucks. While I WANT to go out to dinner with friends, I don’t absolutely need to. In the same way, I don’t always need the new outfit, iPhone case, and new perfume that I desperately want. If I blow all my money on these types of purchases, I won’t, and sometimes don’t, have enough money for the necessities like rent, tuition, or bills. Having the self-control to deny yourself isn’t fun, but it definitely will help you learn how to save a lot faster.
 Making a budget may not the most glamorous thing in the world, but with the “real-world” starting in just a few months, it’s something that I’m finding necessary. For more information and to help you start your budget, I’ve included links to the sites and resources I used. Happy Saving!  

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