When you think of a college student there’s a certain connotation of relative poverty that comes to mind. Most people are familiar with the running joke that college students survive on ramen and caffeine. But does it really have to be this way? Whether you’re on a full ride, receive significant amounts of financial aid, have taken out student loans, or even if you’re making a gargantuan effort to pay out of pocket, the idea of a healthy savings account or a rainy day fund may seem out of the realm of possibility. You may be absolutely right. Currently you could be managing your finances as well as reality allows, but if you don’t follow a consistent budget there is no way of being completely sure that there’s zero room for improvement.
Budgeting for the first time in your life is kind of like paying attention to what you eat. Until you start keeping track of it you won’t have a good sense of the kind of lifestyle you follow. It’s not because of blatant neglect or responsibility. Students have packed schedules. Between classes, applications, jobs, and internships, finding the time to take control of your finances is tough and sometimes knowing where to start is unclear.
You don’t have to begin by crafting a fancy excel spreadsheet or projecting your annual income (although you certainly can!). You can simply start by asking yourself what your financial goals are. If paycheck after paycheck gets eaten up by expenses you can’t even pinpoint and you’d like to have a savings fund that isn’t painful to check, then jot down everything you spend money on, and be real about it. Evaluate the decision to buy that guilty pleasure Starbucks latte you get before your Wednesday seminar. In doing this you get a strong sense of what’s a need and what’s a luxury. Even cutting out just a couple of the non-essential purchases can make a big difference, and depending on what you decide to cut out you can still hold on to that Starbucks latte ;)
If you decide to start managing your money now the most critical thing you can learn is that financial stability isn’t a goal, but a lifestyle. Making a budget that works for you is like solving a puzzle. It doesn’t necessarily mean upending the way you currently live, but rather making small modifications to your current lifestyle. Learning how to save for a specific goal teaches discipline and makes the reward that much sweeter. After all, successfully managing money means you’re a "real" adult right?
When I was in college I was guilty of frequenting Starbucks, maybe a little too much. I never really kept track of my expenses and I wish I could go back and change that. I’m almost one year out of undergrad, and in that time I’ve developed a few systems for keeping track of where my money goes, meeting financial goals, and reducing the stress that goes along with it.
The first thing I did once I knew what my salary would be was decide how much of it I wanted to save. This is different for everyone and I’ve definitely adjusted my goal—nothing wrong with that. Then I made a list of necessary expenses—rent, power, tuition for my Chinese classes, etc. I got into the habit of jotting down everything I bought under my iPhone’s Notes. There are other apps you can use to facilitate this—Mint and Wally come to mind, but for me, the Notes method works just fine for now. As my finances become more complex, I might have to make the switch!
Currently, because I’m abroad and further from coffee shops than I was in my undergrad, I’ve become reliant on making my own coffee and guess what? It’s just as good (if not better!) than what I’d get at Starbucks. Because I don't have easy access to take-out, I've stopped eating out as much. I've realized how many of the things I thought I couldn't live without, are actually not things I need in my every day life.
We know it can be overwhelming to get started and take ownership of your financial future, but the earlier you start the greater the returns. It gets easier as you go along and there is no better feeling than knowing you’ve planned for your future and invested (pun intended) in your financial well-being!