By Maddie Johnson
In my just over two years I have spent to college, I have learned the only surefire way to financially successful is to create a budget.
I spent two years with sporadic income from working shifts at my serving jobs, as well receiving monthly “grocery allowance” I receive from my parents. At this time I thought that I was being good with money by never buying things like clothes, makeup, or other things I didn’t necessarily need to survive. At the end of every month I found myself scrambling for money, feeling deprived, and confused about where all my money had gone.
Yes, I was only buying items that were necessary for survival such as food and snacks, but I didn’t have any sort of limit on how much I put to things like that or any system of tracking my charges. It turned out all my money was being given away to things like snacks, a lot of them unnecessary. Small charges for things like snacks, coffee, and eating out don’t seem detrimental when you swipe your card, but they can and will add up over time.
The only way you will ever be able to know how much you should be spending per month or per pay period on certain items is to create a budget. To create a budget you need the following information: how much money you have coming in every month (as close as possible), how much you typically spend on different categories (ex: food, gas, health, entertainment), and how much you’d like to have left over or save every month.
By tracking the habits you already follow, it can let you know where a huge sum of your money is going and also how you can cut that down to fall within your goals. A lot of times cutting certain categories down really won’t create any sort of drain on your life, and will actually show you where you could be putting more money.
I went through my bank statements and my Venmo and tracked every payment and placed it into a category. I then added up all the income I receive, and set goals for what I want to spend on each category per month. This made it so I was sure of exactly how much I should be putting towards certain things per month and also could tell when I was reaching my limit on certain categories.
This gave me a sense of control and to be honest I have never felt deprived again. It turns out that the amount of income I had was not the problem, but instead the way in which I was frivolously using that income in places where I really didn’t need to be putting it.
I also highly suggest taking advantage of all the budgeting apps that are available. I first created my own budget but soon started using the app Albert to help me track my income and spending and to help me reach my saving goals. Apps like this one allows you to not only track each category and hook it to your bank account, but it will also send you notifications when you are reaching your limit for the month. This takes almost all of the work out of having a budget and leaves it to a professional. This kind of assistance is truly priceless. Some of the most popular and highly rated budgeting apps include StayOnBudget, PocketGuard and Home Budget with Sync.
Maddie Johnson is a student at Arizona State University.