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After I had been in college for about a month I went on the Chase app and saw my checking account balance. To my surprise, I noticed that I only had 20 dollars left out of the initial amount that I was given for my first semester. In addition to only having 20 dollars left I had my credit card bill payment coming up soon so I was in a state of intense stress as not paying my bill on time would affect my credit score. Luckily, at this point in my life, I still had financial support from my parents so I was able to pay my credit card bill on time and received more money to use for the rest of the summer.
This experience soon made me realize that I cannot let this happen again because of becoming an adult. The first thing I had to do was find out how I blew through my money so fast. I quickly realized that I spent most of my money on clothes, trips, and eating out. I shouldn’t have been spending money on eating out at all as I had a meal plan with my school and I shouldn’t be buying new clothes as I already have clothes that are in good condition. This is the reason why I found out how important a budget is and I recommend to you as a student to start developing a budget as soon as possible before college.
The easiest way to start budgeting is to find out what categories you want to focus on but the one I will be talking about is the 50 30 20 rule. The percentage of your money going towards each of the categories is up to you and should be able to fit your lifestyle but a simple way to go about it is to have 20% going towards savings, 50% towards needs, and 30% towards wants. The reason why I picked this method of budgeting is that it is a very easy and effective rule that can help me get started. Budgeting is very important in life as you never want to spend too much money than you can as you never know what events may occur in the future so you want to save 20% at least for savings. Then you want to put aside 50% for needs like food, utilities, phone bill, internet bill, and transportation. The remaining 30% you can use towards wants like new clothes, a new phone, tickets, or any items you desire.
A lot of college students might ask why budgeting is relevant to them and why they should even consider having one. College students should always have a budget set out for the month as this can help them keep their costs organized. Maintaining a reasonable budgeting plan can help students stay out of further debt and can protect them against unwanted credit score damage as college students are relatively new to credit. Now as a college student or future college student reading this I want you to go to the website linked below and develop a budgeting plan for you! Link: https://www.voya.com/tool/budget-calculator
Originally Posted in Wealthy Habits