How to prepare for the unexpected

By Ansleigh Edwards

Personally, I have never been the type of person to get excited about budgeting. I do not find it fun. I find it a rather arduous task that can be quite daunting because of the way that I have approached it in the past.

I’m sure that many others identify with a similar mentality because I was that person too, up until recently.

I come from a lower-middle class family, so worries surrounding money are consistently at the forefront of my mind. On top of that, being a college student means that I must account for costs like rent, electricity, internet and water bills — not to mention expenses such as student loans, car payments and doctor bills that can seemingly pile up out of nowhere.

Over the summer, I was tutoring, babysitting and working at a fast food restaurant. I had accumulated more money than ever before, and yet, I was spending it without reason. At that point, I knew I had to make a serious plan for the future.

After doing extensive research, I decided I needed to develop a plan that would hold myself accountable. I determined that the 50/30/20 budget rule could easily be incorporated into my lifestyle. According to Investopedia, the rule says consumers should spend up to 50% of after tax-income on needs and obligations that are essential, with the remaining split between 30% to spend on wants and 20% left over to split between savings and debt repayment.

Essentially, the rule gives you a set of guidelines to make allocating your money easier, based on your personal financial goals. For me, that consisted of placing my money into three categories at the end of each pay period: 50% to needs, 30% to savings and 20% to wants.

I’ve seen this method used in many different ways from an 80/20 split to even a 70/20/10 split, depending on the needs of the particular individual. The 50/30/20 template just aligned best with my goals.

Months later, I noticed a leak in my car. A trip to the auto repair shop resulted in the diagnosis of a pricey and urgent repair. At that moment, I was faced with a large bill and another serious decision to make. “How will I afford to pay for all of this?” I wondered to myself.

I didn’t have that money out of pocket, but I did have enough in savings. I was easily able to pull money from my savings to cover the cost with no issue.

Not everyone has the luxury to pull from savings when a costly occurrence arises. But, everyone has the capability to budget, which can minimize the toll that emergencies ultimately take on your finances and avoid debt.

As of March 2020, Investopedia found that Americans’ debt totaled $14.3 trillion. That was a statistic that I found both startling and eye opening. Although I do not currently have any debts to repay, it’s imperative that I am planning ahead.

Budgeting has allowed me to experience financial freedom as a college student with a limited income. I no longer associate feelings of guilt and unease with regards to money. No one can prepare you for the unexpected expenses that life throws at you, but you can prepare yourself for what to do when they arise.

Ansleigh Edwards is a journalism student at the University of Georgia.

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