Written by Allison Perry. Media by Kelsey Middleton.
Being an adult is expensive, especially for a college student who most likely makes minimum wage. At a wage below $9 an hour, most college students are still expected to be able to afford transportation, the cost of living, and the crippling price of college loans. One way to reduce the stress that comes when considering all of the expenses of being an adult is to start a budget. It does not matter how many expenses you have or how much money you make, you can and should start a budget.
“I don’t make enough money to budget.”
That is a lie. One reason to budget is you can save money to be able to afford more than just the bare minimum. Budgeting allows you to afford the cost of living as well as the cost of treating yourself and giving to others.
Expense Tracker. Photo by Allison Perry.
“I don’t need to budget, I can afford everything I need and want.”
It really does not matter what your income is or what your expenses are; budgeting is about more than just saving money. Through budgeting, you will gain self-control, responsibility, organization skills, goal-setting skills, and many other skills that are essential in your role as an adult. Aside from that, there is no guarantee that you will always be able to afford everything, so it’s important to have savings on which you can rely.
To begin a new budget, you should have some type of guidance, such as an advisor to help you figure out how to create a budget, an outline to show where your money will go each month, or perhaps both. An outline that works well is the Dave Ramsey Zero Based Budget, which is free to download and print. The last two pages on the download link are where you will plan out your budget.
Zero Based Budget Page One. Photo by Allison Perry.
To start the Zero Based Budget, fill out the outline the month before, so October’s budget will be planned in September. The first thing to do is put an estimated income for that month on the first page. If you’ve been working somewhere for a while, but do not make the exact same amount on each paycheck, the best way to get an estimate is to average out the last few paychecks.
Next, divide your money throughout the outline. Keep in mind: not every section will be used. As a college student, the most important sections are savings, food, transportation, and debts. Fill those out first, then fill out the personal section and the clothing section. You decide how much you put in each section. The goal of the Zero Based Budget is to distribute all of your money across sections so once you are finished there will be $0 left.
The last step to your Zero Based Budget outline is to actually divide out your money when you receive your check. Set up envelopes for everything under the personal section and the debts section. The money that will go into your checking account will be for food, transportation, and toiletries.
Expense Envelopes. Photo by Allison Perry.
Once you have cashed your check and divided it, self-control and responsibility come into play. Track your expenses. Dave Ramsey offers the EveryDollar app, or you can save receipts and track them in a handwritten log. It’s important to track your expenses, not only because it forces you to be mindful of what you spend money on, but it also allows you to see if you need to tinker the amount you put in a certain section on the next month’s budget. For example, if you set aside $60 for gas and realize you only use an average of $50, you can move that extra $10 into savings. What you track is the money from your checking account on food and gas. Pocket money is free to be used on anything. You must not take any money from designated envelopes to use it on something it is not meant for.