Budgeting for students - How I structure my budget
Some who read this have probably already heard of a tool called a budget. For others it may be a foreign concept. In my case I have some experience with budgeting through having part time jobs in high school and saving for university. I understand that the key for living an abundant and fulfilled life (yes even at university) is to prepare for one. Although, you can sometimes do so without a budget I believe planning is the key to enjoying life and getting the most of it even when your a poor student or not a millionaire.
Set up automatic payments
Once you have calculated how much you need to be saving and putting aside for expenses create automtaic payments and transfers. This can be a automatic payments for rent or with your electricity provider. Or even just putting aside money every week into your short term account so you can pay for a top- up at the end of your month or don't spend your food shopping money and drinks with the mates on a saturday night.
This is just how I organise things. Still I am learning and some weeks I am not perfect. Feel free to leave advise in the comments below so we can all improve and learn how to manage our money.
This is the tool I use to not only see where most of my money is going but plan my budget each month, oh and its free!!! https://sorted.org.nz/tool/budgeting-tool#/welcome
First of all savings..You need three of them.
Short-term, long-term and experiences. But why do you need all three?
1. Long term savings, arguably the most important. Long term savings is not the place where you put your money towards your next holiday or for dinner with mates on the weekend. Its where you put money towards you your long term savings goals and needs. For everyone these look different but let's say you are saving towards your next semester deposit for your hostel or a bond for your next apartment. Ideally you want to save as much of your income as possible but chances are that if your a student this won't be much. Set an amount within your means that is transferred weekly like a bill or subscription. This makes it a non-negotiable.
It is important to seperate your long term and short term savings because they both have independant intentions. You can have multiple intentions finacially but you need to make sure both intentions arnt confused otherwise your own goals will self savotage each other. For example, you are trying to save for a deposit for your next installment on your accomidation but you also want to attend somem local concerts coming up. So you save and save and be really well behaved and then convince yourslef because you have saved so much you can buy a couple of concert tickets and before you know it your long terms savings goals are not being acvheived because you are using the money for that goal to socialise.
It is important to seperate your long term and short term savings because they both have independant intentions. You can have multiple intentions finacially but you need to make sure both intentions arnt confused otherwise your own goals will self savotage each other. For example, you are trying to save for a deposit for your next installment on your accomidation but you also want to attend somem local concerts coming up. So you save and save and be really well behaved and then convince yourslef because you have saved so much you can buy a couple of concert tickets and before you know it your long terms savings goals are not being acvheived because you are using the money for that goal to socialise.
2. Short term savings is where you can keep money aside for your bills the next week or your monthly top-up. Therefore, when your top-up or accomidation bill is due at the end of the month the money is there and ready to be utilised and you do not have to worry about asking your parents for a loan because you forgot and spent your money elsewhere.
3. Experiences: This is where you put savings towards socialising. An example would be maybe putting 10 percent of your income in this account weekly so that when that concert you want to go comes up or you want to go visit a friend for the weekend you do not need to go hungry, avoid paying your bills or use money you have saved for your long term goals instead.
How do you know how much to put where?
So you have your expences, spending money, long term savings goals and short term/experinces. How much is enough to put in each account. the key too manging your money well is figuring out what you want to acheive with it and how you can maximise what you have. At the momnet I am preparing for two trips in the next three weeks. So my savings and expenses are adapted to fit my needs in the next three weeks. This means more travel expences and savings going into my experiences and short term accounts opposed to my long term account which is usually my main concern. Find what works for you is the key. I myself am still discovering exactly what that is. These are ideas and basic tools.
So you have your expences, spending money, long term savings goals and short term/experinces. How much is enough to put in each account. the key too manging your money well is figuring out what you want to acheive with it and how you can maximise what you have. At the momnet I am preparing for two trips in the next three weeks. So my savings and expenses are adapted to fit my needs in the next three weeks. This means more travel expences and savings going into my experiences and short term accounts opposed to my long term account which is usually my main concern. Find what works for you is the key. I myself am still discovering exactly what that is. These are ideas and basic tools.
Set up automatic payments
Once you have calculated how much you need to be saving and putting aside for expenses create automtaic payments and transfers. This can be a automatic payments for rent or with your electricity provider. Or even just putting aside money every week into your short term account so you can pay for a top- up at the end of your month or don't spend your food shopping money and drinks with the mates on a saturday night.
This is just how I organise things. Still I am learning and some weeks I am not perfect. Feel free to leave advise in the comments below so we can all improve and learn how to manage our money.
Budget resources
This is the tool I use to not only see where most of my money is going but plan my budget each month, oh and its free!!! https://sorted.org.nz/tool/budgeting-tool#/welcome
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