As a student in college, I have a bittersweet relationship with money and have just begun my journey to real wealth. My spending habits can be described as less than conservative, and sometimes the recreational portion of my budget outweighs the necessity portion. But the first step is admitting you have a problem, right? Becoming more aware of my habits and knowing what I need to do to balance out my personal wants with basic necessities is the most important knowledge to have in finding financial freedom.
Knowing myself as a spender, I cannot simply cut down all unnecessary costs and save every penny I earn. This only ever results in a destructive shopping spree not much longer than two weeks after I decide to save money. When trying to look for tips online for saving money, I came across some advice that compared finances to dieting. When someone starts a crash diet they eventually end up binging and negating all of their hard work. Rather, I have found a way of budgeting that allows me to save money while still feeling fulfilled enough that I don’t go out and splurge on unnecessary things.
It took a while for me to get the balance just right, but I’ve found that treating myself to one small nonessential item every so often keeps me from going on a full-blown shopping spree as soon as I get paid. My plan is easy enough that I can follow it as a full-time student with a part time job, but not so simple that it is ineffective.
Firstly, I plan out what I expect to get paid for the period. I even go old school and keep a record of all my paper pay stubs. This isn’t necessary but it is a great habit to get into especially for people like me who get paid hourly and take home a different amount every pay period.
Next, I plan for all my basic needs like rent, food, and school expenses and considering how much that will cost, I set an amount that I put into savings immediately after I get paid no matter what. Sometimes I do well and can save $100 or more, and sometimes I only end up putting $15 in my savings. For me, it is not so much the amount as it is the habit of putting something away for unexpected expenses.
Finally, I leave myself a moderate amount of money for entertainment or recreational uses. If I give myself the chance to go out for a nicer dinner or get my nails done every so often, I am much more inclined to stick with my savings plan. I consider this money the slice of chocolate cake allowed in my financial diet.
Sometimes allowing yourself a bit of leeway in your budget can go a lot farther than trying to cut out every expense that isn’t strictly necessary. Balance is just as important as discipline when it comes to your financial journey.
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