HOW TO CREATE YOUR STUDENT BUDGET FOR THE NEW YEAR

It’s the new year… And you’ve decided that the way you manage your finances needs to change. Maybe money even tops the list of what you want to be more intentional about.

“This year I promise to save. I will research investment opportunities and start growing my money. So I won’t buy anything that’s not necessary. I will plan my money and make sure I don’t spend more than 1000₽ each month.”

Wait a minute. That’s not how it works…

Determining how much you’re going to spend for a particular period is not the easiest thing to do. However, it is one of the best decisions you’re going to make at any point to reach your financial goals.

Creating a budget will help you understand where all your money goes and will give you clarity on your spending habits while helping you make proper adjustments on your money journey.

So how do you create a realistic budget you can stick to?

1. Define a period for your budget: Many people like to assign money to spend for a month. While this is standard, it will be wiser to even go further to divide that money into weeks and work with that instead.

This will help you not only monitor your expenses but will also make sure you’re not spending all your money at once. You will also get to check in often to see how your finances fluctuate.

You can also pick a regular date to go through your budget, probably at the end of the month. To assess the previous month and set a new goal.

2. Determine your income: So to create a working budget, you need to know how much money comes in, which ultimately decides the kind of lifestyle you can afford.

If you don’t know how much you have, how do you know what is a want or a need? How can you tell if saving $10000 per year is feasible? You’re simply not going to know.

So add up everything that comes in, from your stipend (if you’re a scholarship student) to your salary (for those who work), to the money you’re getting from your parents or earning from your businesses.

3. Identify and categorise your expenses: Now, you need to think about how much you should set aside for both essential (fixed) costs and flexible (variable) costs. 

Essential costs should be things you have to pay regularly like accommodation, phone bills, transport, food etc., while your flexible costs are things that just come up like entertainment, taxis, eating out, gifts and flexing.

Next, it’s time to balance your finances. Just look at what you have now and make sure you don’t have more expenses than income. One thing— adjust your habits.

The solution would be to either reduce your expenses or increase your income– get a job, explore a skill, offer to help someone for money. Just make sure you don’t borrow😅.

Here are some very useful tips if you’re willing to cut down on your spending to make this budget work:

1. Ask yourself questions when you’re going to buy anything: Do I need this? Is it cheaper elsewhere? Will I use it? Is it worth it? This is the first step to escape mindless spending.
2.  Cook your food: It’s not every time you should eat outside. Use YouTube to learn how to cook. You’ll be saving a lot of money that way.
3. Save money on regular purchases: Reconsider those snacks you buy every day during your class breaks. These expenses can quickly add up to a huge sum at the end of the week/ month.
4. Take advantage of sales: Strategic spending is also being conscious of when your favourite stores have discount sales. You can also target your winter clothing and buy ahead of time to avoid spending unnecessarily because of increased prices. Always find the best deals.
5. Find out what you can get for less (or for free): Student discounts are always flying around. From transport cards to music subscriptions to flight discounts, you can spend less every time you prove you’re a student.

4. Manage your budget: Going weekly will be the best approach as I’ve mentioned above. To do this, you should set a weekly allowance after considering the real amount you will and can afford to spend. 

It would be very wise to set aside this allowance by moving the rest of your money to a wallet in your bank app (certain accounts allow this).

You can also take out a certain amount of cash at the beginning of the week instead of paying with your card. Or you can just open a different bank account.

5. Update your budget: Now and then, at the end of the month preferably, you should go through the previous month and check what was difficult for you.

At any point, we want to be safe, so underestimate your income and overestimate your expenses. So if anything arises, you don’t drown but you rather end up with extra cash.

Don’t be too rigid. You may need to constantly revisit your plan and adjust as your expenses and income change. 

6. Keep going: Working with a budget is not as exciting as it looks, because it takes some level of deep consciousness. You may not even get it right the first few times.

However, you’ll be grateful when you realise you only possess useful things and can account for your money at the end of this year.

You may even find out you have some savings to buy that gadget you need or you finally get to travel to Dubai for Christmas.

Don’t be tempted to look over and see how your friends are spending their own money. Trust us, keeping your eyes on your budget will eventually pay off. It’s worth it.