My New Favorite Thing: Budgeting!
This week, I’m taking a slight detour from career development and job search topics for something equally relevant:
We have students coming in to the office every day who are worried about how they are going to pay for school. They are right to be concerned-a college education is expensive (but well worth it)! They are also in the right place. We have quite a few opportunities for students to receive grant money. See our website for more details.
However, there are definitely steps you can take on your own to make sure you are managing your finances well. Whether you are in school, working, or job searching, budgeting is one of the most important and useful things you can do. I’m actually kind of obsessed with creating my own budget at the moment. I’m moving to a new apartment this weekend and with some new bills to pay, I am realizing how AWESOME it is to be organized and more mindful of where and how I’m spending my money!
I’ve created a few different budgets over the last few years, mainly at the urging of my father, but not once have I actually followed through or felt committed to any of them. So, even though I had it all written out, I’ve never really have a good sense of what my spending patterns are. Which is kind of the point…right?
So, this year I decided to actually do it. I opened up an Excel spreadsheet and got to work:
1) First step: Keep track of everything you spend. This comes first because in order to create a budget that works, you will need a frame of reference. Knowing what your spending habits are to begin with will allow you to create a realistic budget that you can actually use!
I’ve started to carry a small notebook in my purse and I write down every purchase. At the end of each week, I enter it all into a spreadsheet on my computer. The spreadsheet has categories like “Rent”, “Utilities”, “Car-Fuel”, “Groceries”, “Savings” etc. You can come up with your own categories as needed. No matter what method you decide to use (a notebook, the computer, or a combination), keeping good records is essential to your budgeting success. This is an easy thing to let yourself cheat on, but don’t! All of those small purchases, like a cup of coffee or those delicious looking cinnamon rolls they have at the Titus Creek Cafe today, add up. For your budget to work, you have to record every penny!
2) After one month, analyze your records. How much did you spend for each of your categories? Did you have any emergency expenses that came up? Are you spending too much? Spend some time looking at the patterns and then set some goals for the next month. Maybe there is a category you want to cut back on or maybe you want to be putting a few extra dollars into a savings account. Write down these goals and keep them in mind as you continue to record your expenses. Over the next month, compare the goals to what is actually being spent and try to adjust your spending behavior to match the goals!
Of course, from month to month you may find that you need to change your goal amounts a bit. Give yourself the freedom to do that as necessary. As long as you are being more mindful about spending habits, you are succeeding!
And that’s really all there is to it!
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