College Connect: Starting in college – measured spending and saving

Posted By Natalie Savarino

By Alex Ring

We learned in Econ 1010, that money is defined as a medium of exchange, a unit of account, and lastly, a store of value. As the school year, approaches I begin to understand that last part — the practical job of money. A store of value means that when you transfer purchasing power from the present to the future and when done correctly can keep all other aspects of personal finance in working order.

Technology has transformed this once bland idea into an essential habit through mobile apps. These apps begin hold the power of a financial advisor with the convenience and of an app for your latest smartphone. Companies like Mint.com, Appxy, MoneyWiz etc. offer apps that specialize in low effort managing that tracks percentages of different spending categories, tracks the payment of bills and keeps an organized budget.

Investor Warren Buffet said, “Do not save what is left after spending, but spend what is left after saving.” In order to save correctly, it’s is advised that you stay goal-oriented throughout the process. A realistic mix of short-term goals and long-term goals can keep you focused on saving and make the process of saving more enjoyable.

So what are goals for a college student? I have been saving up for a car for 18 months, but along the way, I have saved for things like a new phone or new bike. One item does not take any special priority over the other, but together they create urgency to save and keep you focused on what is actually a necessity.

In reality, finding the time and willpower to log every expense and revisiting/adjusting your budget is not a normal habit for a college student. Instead of constantly worrying about what you can or can’t spend money on, take your daily routine and think about ways to cut corners. Apps like TexbookMe lets you compare the prices of textbooks online so you can pay the least amount of money possible and avoid the costs of new textbooks every semester. One of the worst feelings is returning a slightly used textbook for a fraction of what you paid.

Limit your spending when necessary but use the help from technology to stay on your goal. It is crucial to not fall into debt as that can heighten the stress in every other part of your life. If the applications and other web-based software are not cutting it, Sen. Elizabeth Warren (D-Mass.) popularized a budgeting technique called the 50/20/30 rule. She said that you should budget 50 percent of income for necessities and 20 percent on long-term needs. The 30 percent that is left is allocated for short-term day to day wants.

However you choose to do it, creating the habit of careful and measured spending is something you will never regret and it is a crucial step to maturing and handling your money properly.

Alex Ring is a sophomore at the University of Missouri, studying journalism.

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