Hey everyone, my name is Phil Erickson. I am a junior financial investments major at Wilkes University. I play on the men’s ice hockey team, in addition to serving as vice president of both the Student-Athlete Advisory Committee and the Dean’s Student Advisory Board. Throughout my time at Wilkes University, I have had the opportunity to interact with many different students all over campus. One of the main concerns for most college students is money. Students are always looking for ways to stretch the money they make from a summer or part-time job to cover an entire semester’s worth of expenses.
No matter what you are spending your money on, the best way for students to make the most out of their income is by budgeting. For those of you who have not heard of this term, a budget is a plan that helps you decide how to spend your money. Budgeting allows you to track all of your revenues and expenses so you do not end up spending more money than you actually have.
Here are some budgeting tips that have had a positive impact on my life during the past three years of my college experience:
1. Differentiate Between Needs and Wants
Differentiating between needs and wants may not be as simple as it sounds. Each individual has different priorities than the next. The best way to differentiate between something you need and something you want is by making a list of items that you are saving up for. After making the list, go through it to determine how soon you need that item and if you can live without it. For example, I could live without buying the newest pair of Nikes shoes, but I still need to have enough revenue each month to buy groceries and pay rent. After prioritizing your list of needs and wants, you can make your own decisions on if your wants can fit into your budget. At the end of the day, you can always save up for one of your “wants” to buy in the near future!
2. Pay Yourself First
One of the best ways to make sure that you have enough money for a future need or want is by saving some income from each paycheck. Make sure it is the first thing you do after you get paid. Many sources suggest that you should save at least 20 percent of your monthly income. As college students, this is a great goal to strive for. If 20 percent is too high, that’s okay! Another great way to set a savings goal is by setting aside a certain amount of money each month that you would like to save. This could be any amount; whatever works for you. Whether it is $50 or $200, any amount that can be saved up for a long-term goal will benefit you. Saving that percentage of income or income amount will add up after a few months. Pay yourself first!
3. Organize Your Budget
I have found that the more organized my budget is, the easier it is to stay on top of my finances. Personally, I believe that keeping my budget in an Excel spreadsheet has been the most efficient way to stay organized. By using Excel (or even Google Sheets), you can set up different tabs for each month, which makes it easier to keep track of your revenue and expenses over a long period of time. Using a spreadsheet also allows you to use formulas, so that the rest of your data stays current if one variable is changed. For example, if my job gives me a $1 raise, that will change my weekly and monthly income. It will also change the amount of money I would like to spend and save. By using formulas in Excel, changing my monthly income will change my spending/saving amounts in real time, so I do not have to worry about calculating these values on my own. The ability to change variables in real time while keeping all of my revenues/expenses in one place are two of the main reasons why I keep my budget in a spreadsheet. It makes my life much easier, especially for someone who is always on the go.
Remember: List your priorities of needs and wants, pay yourself a fixed amount from each paycheck, and organize a budget in an Excel spreadsheet or on Google Sheets to stay on top of your finances and adjust formulas accordingly.