All About Budgeting for Students: Why and How to do it?
As a student, it might be easy to fall into situations of financial struggles. However, it’s not a result of your excessive spending, but a lack of proper budgeting. As a matter of fact, it is possible to spend on expensive items without resorting to being penniless, but this is only if you understand how to budget effectively. Firstly however, before getting to the details, you might need to understand what budgeting is and why budgeting for students is so important.
What is Budgeting?
There are a lot of technical definitions of budgeting; But in summary, budgeting is the process of calculating how much money you must earn or save during a particular period. It also helps you plan how you will spend it.
For example, let's say that you have $299 to spend for a week. When you make a list of things you would spend your money on, and how much you want to save, this is called budgeting.
The Importance of Budgeting for Students
Budgeting as a student is very necessary, this is because:
It helps you avoid unnecessary expenses.
It helps prioritize your expenses based on what's important to you.
It helps you prevent overspending (very important).
It helps you stay healthy because you hardly have to worry about your financial life if you budget your expenses effectively.
Therefore to help you establish these benefits, here are some tips for you to budget effectively.
Budgeting Tips for Students
To be more proficient at budgeting, there are a few ways which you can explore:
Create a spreadsheet of your wants and needs
Creating a spreadsheet of the things you need will help you prioritize things that really matter. This way, you will know exactly what to spend your money on and therefore prevent you from overspending.
Set yourself a saving and spending goal
Setting savings and spending goals is highly important in budgeting effectively as a student. For instance, if you have $299 to spend for a week; You can allocate about 30% of your allowance for your savings. And the rest for your spending. Doing this can help you buy the things you want without compromising your savings.
Have a set amount of cash for your expenses
Setting your expenses is a practical approach to managing your finances effectively. It imposes a clear spending limit, helping you avoid overspending and impulse purchases.
Also, by paying with cash, you can prevent debt accumulation, as you're not relying on credit cards or loans. It also promotes mindfulness of your spending habits, leading to more conscious decisions.
Avoid Impulse buying
By pausing to evaluate the necessity and affordability of an item before making a purchase, you can prevent unnecessary spending and stay aligned with your budgeting goals.
Learn to Negotiate For A Cheaper Deal
When you need to buy something, negotiating for a cheaper price can effectively save some money. To do that, start by doing your research to understand the market value of the product or service. Then, approach the negotiation with confidence, articulating your reasons for seeking a lower price. If the terms aren't favorable, be willing to walk away.
Stay Disciplined
Stick to your budget as much as possible, even when faced with temptations to overspend. Try to remember your financial goals and the importance of living within your means to avoid unnecessary debt.
Conclusion
Budgeting, for students like you, is a crucial skill to learn. This is because budgeting will continue to be used in further stages of your life, helping you to cultivate a balanced lifestyle, free of debts and other financial consequences. Overall, budgeting requires you to be disciplined and develop planning habits, so cultivate that to budget successfully and reach your financial goals.
Edited by: Suksan Yosela