Mov­ing Up: Of­fi­cially Broke 

POV: Young, Dumb, and Broke just be­came your new fa­vorite song. Or not, it is a bit over­played. But re­gard­less, you are young, and af­ter mov­ing into your new apart­ment, you might feel that you are broke. Bills are a real and stress­ful thing that one day ap­pears in your life, whether you are ready or not. But don’t worry, luck­ily for you, Mov­ing Up is here to en­sure that you won’t be dumb. There is one se­cret that every col­lege stu­dent must know that can save you a few grey hairs and wrin­kled lines in the fu­ture: A bud­get! I know it’s not a fun idea, but un­less you want your next move to be into a card­board box, I sug­gest you strongly con­sider this op­tion. Now I know what you are think­ing. Where to start? How can I man­age every­thing? What if I re­ally re­ally RE­ALLY need re­tail ther­apy? All your wor­ries will be an­swered, and much more! So, grab a pen­cil and pa­per and get ready to take some notes! Or I should say an elec­tronic de­vice, pen­cil, and pa­per is so old school. Nev­er­the­less, let’s get started! 

To start, what is a bud­get? A bud­get is de­fined as, “an es­ti­mate of in­come and ex­pen­di­ture for a set pe­riod of time.” In a sense, it de­ter­mines how much money you will make and how much you will spend money in each amount of time. There are a lot of ben­e­fits that come with cre­at­ing a bud­get for your­self. Such as, your fi­nan­cial plan can be cus­tomized to fit your spe­cific needs or goals at the time. Then, as time passes on, you have the free­dom to reeval­u­ate your plan for your new sit­u­a­tion. Al­though it’s not al­ways fun, some ben­e­fits in­clude: 

• Vi­su­al­ize the flow of your fi­nances and im­prove spend­ing habits 

• Re­duce fi­nan­cial stress 

• Achieve fi­nan­cial goals, in­crease sav­ings, and im­prove fi­nan­cial se­cu­rity 

• Pre­pared for emer­gen­cies  

• Re­duce debt  

Most of the time, we are un­aware of how much money we are ac­tu­ally spend­ing, un­til we write it out. From the late-night tar­get trips, to go­ing to din­ner with friends, get­ting the most needed sweet treat every night, or sim­ply a hol­i­day shop­ping spree, the spend­ing adds up quickly. Cre­at­ing a bud­get will al­low you to vi­su­ally see where your money is dis­ap­pear­ing to, which will al­low you to re­lieve some fi­nan­cial stress as well as ben­e­fit you in the fu­ture. Will Kabbes, a fi­nan­cial ad­vi­sor, said “I know it was my ma­jor, but tak­ing my spend­ing se­ri­ously in col­lege was one of the best de­ci­sions I have ever made. It was­n’t easy, but it taught me re­spon­si­bil­ity and the value of money. In­stead of go­ing to buy a bliz­zard from Dairy Queen, you could be sav­ing that money for a fu­ture car, phone, lap­top, gro­ceries, a pre­sent, etc. Now this does­n’t mean do not ever spend un­nec­es­sary money, but in­stead of get­ting a sweet treat every night, cut back to once a week. Just a slight change can make a sig­nif­i­cant dif­fer­ence over time.  

Ok ok we get it, a bud­get is a good thing, but how do ac­tu­ally cre­ate one? Great ques­tion! I am so glad you asked!

1. Cal­cu­late your net in­come 

2. Track your spend­ing 

3. Set re­al­is­tic goals 

4. Make a bud­get plan 

5. Pick a bud­get­ing method 

6. Ad­just your spend­ing to stay on bud­get 

7. Re­view your bud­get reg­u­larly 

Hav­ing a bud­get does­n’t have to be mis­er­able. You can add in fun spend­ing with­out break­ing the bank. If you want to be suc­cess­ful, the plan needs to be re­al­is­tic. To start, you need to fig­ure out what your net in­come is. If you are like me, you may not know what that term means be­fore start­ing this process. A net in­come is the amount of money you bring home af­ter taxes and other de­duc­tions are taken out of your pay­check. In other words, It’s the money left over af­ter mak­ing your fixed ex­penses. This is im­por­tant so you know how much money you are bring­ing in, how much money you have spent, and how much money is left over.  

Next, take the time to look at youth spend­ings over the past month. This part might be hard to look at and see how much money was wasted on ran­dom things, but it is im­por­tant. This step will not only give you. a clear view of what you are spend­ing your money on, but also help you eval­u­ate how much money is needed to bud­get for spend­ing every month.  

Af­ter eval­u­at­ing, you need to cre­ate a list of goals you want to ac­com­plish when it comes to your bud­get. This can be seen as short tern or long term such as,  

Short term: 

• Sav­ing for a va­ca­tion/ new car 

• Pay­ing off credit card bill 

• Cre­at­ing an emer­gency fund  

Long term:  

• Re­tir­ment  

• Pay­ing off debt  

My ad­vice would be to make a list of both short term and long-term goals that you want to ac­com­plish over the course of your life. Then cre­ate a RE­AL­IS­TIC plan of how you are go­ing to ac­com­plish those goals. This seems scary at first, but to start, sim­ply cre­ate a monthly bud­get plan that will help you move in the di­rec­tion of those goals over time. It would be un­re­al­is­tic to say that you will have enough saved for your re­tire­ment by next year but putting $50 a month into an in­vest­ment fund over the course of your life will make an im­pact.  

Now af­ter you have cre­ated a plan, choose a bud­get­ing method that works for you. Ei­ther you can make an ex­cel work­sheet that plans every­thing out and tells you the ex­act num­bers you are al­lowed to spend and save, or you could do some­thing as sim­ple as every pay­check move a cer­tain amount of money to your sav­ings ac­count. Then do not touch your sav­ings, un­less nec­es­sary. There are more op­tions out there, and it is im­por­tant to find the method that works best for you. Money is per­sonal, so your bud­get should be the same. Hav­ing a plan that is re­al­is­tic for you is the only way that you will be suc­cess­ful in your goals. 

Next, it’s time to act. This is where it gets se­ri­ous. You can be all talk, but this is where your words must come into ac­tion. Sadly, you must now im­ple­ment the plan into your daily life. With any­thing, this will take prac­tice to get used to. I will not lie to you; some days will be eas­ier than oth­ers, but the re­sult is worth it. Con­lan Walsh, a col­lege stu­dent, said “In the be­gin­ning ac­tu­ally stick­ing to my bud­get was dif­fi­cult, but now I am used to mak­ing smart spend­ing de­ci­sions. Of course, there are times I want to buy a cof­fee when I could make one at home, but hav­ing a bal­ance is also key.” This is the time in our lives where it’s nec­es­sary to live a lit­tle cheaply to live like bosses in the fu­ture. All good things come to those who wait!  

WAIT we are not fin­ished yet! If you want to truly know the se­cret to be­ing suc­cess­ful in bud­get­ing, it’s this key part right here. You must reeval­u­ate your plan every few months. Even if you don’t make any changes, it is ex­tremely valu­able to go over the bud­get and ad­just as­pects that may not be work­ing. Life is con­stantly chang­ing, so we need to change with it. For more in­for­ma­tion on bud­get­ing, click here!

That is, it! That is every­thing you need to know about how to cre­ate the per­fect bud­get for your­self! The cost of liv­ing is not cheap, but it does­n’t have to be un­bear­able. In col­lege you aren’t sup­posed to have every­thing you could ever want. Hav­ing con­trol of your spend­ing habits is an im­por­tant skill to learn and the ear­lier you learn, the bet­ter off you will be! It takes time to get used to hav­ing to save for rent and that truly if you don’t pay, you will be kicked out. Scary, but it’s true. How­ever, you were lucky to find Mov­ing Up to help along this jour­ney! 

Want­ing to know more? Check back to Mov­ing Up for more need-to-know con­tent about life off cam­pus and to learn about the next step and fol­low us on In­sta­gram at movin­gup_mu !!