At the beginning of this week, I had $100 cash for two weeksâ€™ spending. This obviously does not include my $650.00 monthly rent and utilities; it was pocket money for food, water, transportation, and other costs that might come up. It is now Thursday, and I have $50 left for the remaining week and a half.Â Â
As students, we often come to question, â€œWhere did my money go?â€ It isnâ€™t until we sit down and analyze what we spend our money on that we come understand our spending habits. Below is a breakdown of a UCSB studentâ€™s budget for the month of January. Her part-time job and some family support barely leaves her with extra cash.
Food – $181.00Â
Gas – $91.00Â
School expenses – $89.00Â
Rent – $662.00Â
The total of her expenses comes to $1,023; she earns $1100 at her job, which leaves her an extra $77 each month for emergency or miscellaneous costs. She manages not to struggle with her expenses by a few easy money-saving rules:
Tip #1: Write down all your expenses for one month, and go over it and see where youâ€™re spending large portions of your money. This will help you realize if you are spending your money unwisely and eliminate the unnecessary expenses. Experts confirm this by advising to keep a small notebook in hand to immediately write down what you buy, even creating categories to help you stay organized.Â
Tip #2: Establish a budget after analyzing your monthâ€™s expenses to get a clear and precise view of your spending habits. Utilities and rent, of course, are items that cannot be changed; however, other expenses can be cut down more easily, such as eating out, going clubbing and seeing movies.Â
Tip #3: Spend no more than your actual income, whether your money is coming from your job or your support system. This leads to our next tip.Â
Tip #4: Set up two accounts, one checking and one savings. Move 10 or 15 percent of your income to a savings account each month; this is your back-up money. The key is to pretend you have no savings account so that you wonâ€™t be tempted to tap into it later.Â
Experts say bad spending habits come from using credit and debit cards. Convenient as they are, they allow us purchase away without keeping track, a habit which leads to carelessness and that horrible feeling of overdraft. We then look at the statement and realize how little purchases here and there, such as seemingly innocent trips to Starbucks or Jamba Juice, weigh heavily on our bills.Â Â
Credit card users also tend to forget that their credit history stays with them forever; late payments affect overall credit scores, increase interest rates, and worsen debt. Now, is that delicious Skinny Vanilla Latte really worth jeopardizing your future financial state?Â
The best way to stay on top of expenses is to write them down and go over them. Figure out how much money you have for each month, create a budget based on that amount, and stick to it.Â
After my own rude awakening regarding the $50 I have left for this week and next, I sat down today and compiled a list of all my spending. Letâ€™s just say Iâ€™ll be laying off the Skinny Vanillas for a while.