Being a frugal student or living a frugal student lifestyle doesn’t mean you have to give up all material things and stop going to the movies or enjoying dinners at restaurants. Instead, being frugal is really more about being smart with your money and being aware of the value of money and these frugal principles are ones which can benefit anyone, in any stage of life or financial situation. I want to show you how to budget your money in college:
1.Take responsibility for your financial situation to budget your money.
Frugal living is about responsibility. This means you need to acknowledge that it is no one else’s fault that you are in the financial situation that you are, and no one else should have to take responsibility for managing the situation but you. As soon as you take responsibility for your finances you will be able to see any issues clearly and go about solving these problems logically, rather than responding emotionally.
Being responsible for your financial situation as a student also means having all the information and to maintain a frugal life where you are able to control your money without it controlling you, you need to make regular checks of your credit report and score. This helps you know whether there are bills which should have been paid which were missed, and can also keep you aware of any fraudulent activity in your name.
2. Know the value of money.
Being frugal is not about going without, but it is about going without the things which are unnecessary. Therefore an important frugal principle is being smart with your money and to do this you need to know its value. This means you take the time to shop around for the best deal, or you pass over the more expensive product with extra features which you know you don’t need, to purchase the cheaper one you know you can afford, and which fulfils your needs. You also should avoid buying everything with your student credit card.
3. Paying yourself first
There is no purchase or bill more important than you. To be frugal with your savings, create a direct transfer from your wages each pay day so that a portion of your wage goes directly into a high interest savings account.
Paying yourself first means that no matter what else happens you’re able to protect yourself, your family and your future as you should make sure to keep between three and six months worth of expenses in your savings account in case of emergencies. This is the best way to budget your money.
Making a budget requires you to be realistic about what you can afford after your wages have come in and your bills have gone out. This helps you remain frugal because you are living within your means and spending only what you can afford, because it has been budgeted for. To make sure your budget is accurate, track your actual expenses by keeping receipts and entering purchases into your budget spreadsheet. In this way you can see where you are spending the majority of your money and identify places you go over your budget unexpectedly, allowing you to rectify your budget in the following month.
5. Planning for future expenses
If you want to be frugal in making your money go further, you need to be clear about where it has to go. This means you need to think about your plans for the future and how much money you will need to achieve those goals. It may be that you are planning a family, you want to pay for your child’s studies, are planning a retirement or you simply want to make sure you can keep up with the costs of living. Whatever your plans for the future, knowing how much money you need to achieve them and when you need that money will help you manage the costs in your future responsibly, without having to take out loans or use credit cards to pay for them. You don’t want to be stuck paying off debt.
6. Adjust your attitude
Living a frugal student lifestyle and being smarter with your money is not just about what you are doing, it is also about why you are doing it. Having the right attitude towards life, money and possessions will help you make smarter financial decisions. When you realize that it is alright to have nice things, but it is not essential, then you will be able to adjust your goals to be achieved when you can afford them, not when you want them and have to extend yourself in debt to buy them.
7. Consumerist products
Of the things you want to buy from the point above, when you adjust your attitude you will realise that not all of your possessions have to be brand new. There are a lot of good quality clothes in second hand stores if you take the time to look for them, and you can even make your own clothes for a fraction of the price of new ones. While you are considering making your own clothes, look at what else you could make to be more frugal – you could bake your own bread, make your own jam or craft your own Christmas presents. You also don’t have to go completely without and if you can shop smarter you can be more frugal with your money, for example shopping online can save you money and time and many websites will run specials on free delivery.
8. Consumerist services
It is nice to go out to dinner or be able to put your clothes in the dryer rather than taking the time to hang them out on the line, but these are also unnecessarily costing you money. To be frugal look for ways you can cut back on your luxury services, for example instead of eating out with friends take turns to host dinner parties at home to save money, and instead of turning up the heat in winter to keep warm, snuggle up in bed under a few extra blankets.
That’s how you can easily budget your money in college.
This was a guest post from Fred Schebesta.