Tips and Tricks for Budgeting
- Create a Buffer
Understanding that what you plan for isn’t always the case. There are going to be unexpected expenses that come up especially with being a college student. You will learn when to expect these and how to deal with them as you practice consistent budgeting. In the beginning, you should set aside a small amount of money for unexpected expenses. This buffer zone can be used to put into small savings that will allow you to use when needed for instances like your car break down or computer needs to be replaced.
- 50/30/20 Rule
This rule breaks down your expenses into three easy categories needs, wants, and savings. This allows you to use 50% of your budget for necessities like rent, groceries, insurance, etc.. The 30% aspect is giving you the freedom to spend on your wants such as eating out, shopping, and other needs that may arise. The last part is 20% which is meant for savings, this part can be easily exchanged for the 30% if you see that your spending less than you excepted on wants.
- Review Past Budgets
Reviewing old budgets is an overlooked benefit that many people forget to do. This gives you insight into how you did the past months. By reviewing each transaction you have made documenting out the budget category amounts. When looking at this overtake a bit to review the prior month’s spending. You may be surprised by how the budget turned out from the preceding month. Always remember that good
Written by: Blake H., senior in Finance