Budget, Budget, Budget!

As you can probably guess from the entry’s title, this entry is all about keeping a budget in college.

This is quite possibly one of the most important skills one will ever need to acquire throughout one’s life.  Budgeting is very important to your financial well being.  Through budgeting, you are keeping track of your money and how it is spent.

There are three main ways people can keep a budget: Writing it down in a Budget Book, Using Budgeting Software or Using Online Banking.   Does it really make a difference as to which one you choose? No.  It’s all just a matter of personal preference.

Once you’ve decided how you are going to keep your budget, the next step is to categorize your budget.  Aside from the Savings category, most college students include categories such as Groceries, Entertainment, Travel, Car Maintenance, Gas, Clothing, and Electronics.

So…how do you know what to save and what to spend?  First thing’s first-figure out about how much money you will receive each month.  It is recommended that out of the total amount you receive, you save about 25-30% of it.  The rest is used for spending.  Of the money you spend, figure out about how much each month you will use for each category and add it.  This becomes your monthly budget-your spending limit for the month.  Then every time you make a purchase, write it down under the designated category of the purchase.  At the end of each month, calculate the total amount of money spent, subtract it from your budget, and this becomes your balance.  If the answer is a zero or a negative, you did well and have spent no more than your limit and/or have money left over for next month.  However, if the answer is positive, this means you have gone over your budget and spent more than you planned and/or should have.

Advertisements

Tell us what you think!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: