By Izzy Bisges
Four days a week, Caroline Hull works as a nanny, caring for and playing with the children she watches. The money she earns from the part time job doesn’t stretch far for the University of Georgia senior, who has tried to create a budget she can follow.
“I think it’s pretty difficult to start building a budget as a college student because I’m not making a ton of money,” said Hull. “I have a small job, getting paid very little, and I do a lot of spontaneous things for fun.”
In Hull’s view, a budget begins with how much she is making. With less earnings, she said she feels limited in her ability to create an effective budget.
However, Michael Thomas, who teaches the introduction to personal finance courses at UGA, said the amount of money one makes should not restrict their ability to establish a budget.
“A spending plan is not based on how much you have. If we can establish good financial habits with small numbers, then those same habits are going to transfer when we have more money,” Thomas said. “If we can’t effectively manage $20, how are we going to effectively manage a salary of $70,000?”
When it comes to budgeting, creating a healthy plan and sticking to it is critical. The number one mistake people make is having unrealistic expectations in their financial plans. According to Thomas, when building a budget, the objective is to set attainable and achievable goals.
“If we don’t have realistic expectations about our baseline and where we actually are, we start engaging in a process beyond our capability,” Thomas said.
According to Thomas, creating a budget plan beyond your capability includes making financial promises you are likely to break. Some broken self-promises may include underestimating how much money you are going to spend in a week, overcommitting to social plans, and the fear of hurting other people’s feelings by canceling.
Relationships are a huge consideration when creating a budget that works for you. Many college students want to be “social and attend as many events as they can,” said Hull, but she questioned how to best balance fun with building savings.
Making promises to attend events with your friends is easy, but properly managing your money should be a priority when it comes to balancing a healthy budget with social activities, said Thomas, adding that understanding a budget isn’t there to restrict your lifestyle, but is instead there to help you achieve your financial and personal goals, can lead you to an anxiety-free plan.
“Nobody can be all things, to all people and you’ll see that reflected in someone’s spending. If college students can get the handle on that now, it’s going to benefit them considerably because they’ll learn how to set boundaries,” Thomas said. “People aren’t going to respect you less; they’re going to respect you more.”
In an article titled, “How to take Anxiety and Stress out of Budgeting,” Ryan Inman explained that a spending plan can actually lead to happy endorphins and a guilt-free conscience.
“A budget is not restricting at all,” Inman said in the article, published on the website Financial Residency. “Rather, it’s a tool that helps you with your money, and the more you practice and stick to it, the better off you’ll be financially.”
Izzy Bisges is a journalism student at the University of Georgia.
