BY: Hope Murphy
Wondering where your money went this weekend? No worries. Scott Rowe, Assistant Director of Financial Aid, shared the best ways to manage your budget during his Creating a Budget Plan LEAD event presentation on Oct. 17.
Step 1: Needs versus Wants
Determine your needs versus your wants. Needs are unavoidable expenses that have the highest priority (i.e. car insurance, student loan, textbooks, etc.) Wants are expenses you can live without (i.e. $10 smoothie, $14 movie ticket, $999 iPhone X, etc.)
Needs and wants are different for everyone and they can change over time. However, breaking down how much money you spend in your wants can show you how much money you spend on things you do not need or push you to find cheaper alternatives.
Step 2: Create a Budget
Open an Excel spreadsheet and make three categories: income, needs and wants.
In the income category include all the money you make whether it’s from a job, money your parents give you or when you find $10 on the street. In the needs and wants category fill in all expenses written from Step 1.
You can keep track of your expenses whenever you get paid. If you get paid bi-weekly, then set your budget for two weeks at a time; if you get paid once a month set your budget on a monthly basis; so on and so forth.
Step 3: Keep Track
Once your budget is created, keep track of your spending habits. Keep receipts and follow your checking account through an app or bank statements.
Staying on top of where your money is going will make you feel confident that you are spending your money wisely. Take it from Rebecca Volmy, biology major, who used Rowe’s tips and spent below her grocery budget.
“I feel more mature because I know how to manage my money,” she said.
Step 4: Build a Buffer Zone
Once you have managed your money, build a buffer zone. A buffer zone is the amount of money you have in your wallet that goes untouched. This is not the same as your savings. This money is there for minor expenses like when you don’t expect your Denny’s order to be more than $10 so you dip into your buffer zone to pay the difference. The next time you get paid you can put the money back into the buffer zone.
Having good spending habits today, could prevent you from falling into debt later on. Good spending habits can help you plan for fun trips, buy things you want and prepare you for the unexpected.
To create your own budget plan sign-up for free at www.cashcourse.org
To attend the next LEAD event go to https://daemen.campuslabs.com/engage/organization/LEADS to reserve a seat.