Almost every person I know worries about their financial situation one way or another. And in the wake of the Covid-19 pandemic, it is no surprise that many people, especially the younger crowd, are feeling a heavy weight on their shoulders financially.
My kids are out of college now, but they worry about not having enough knowledge about budgeting. Here are some suggestions that have helped them tremendously. These might be helpful also to some struggling college students (or anyone) out there who needs them.
Keeping a budget as a College Student
People who are good at handling their finances work on an in-depth budget for the next month. Budgeting does not mean restricting spending but predicting your expenses at any given time. Keeping an acceptable budget is one of the most important things you can do.
Creating a budget is a balancing act for sure. There is a learning curve and external factors that influence how you budget. But once you get the hang of it, you’re all set. When you make a budget plan, plan for the worst, and hope for the best. You can even do it on a spreadsheet if you are feeling fancy.
There are a lot of productive ways that one can do to save money. These are some of them:
Listen to Finance Podcasts
Another way to improve your financial literacy is by listening to podcasts about finance. You can learn so many things about budgeting and other topics about financial matters through a podcast. You can listen while doing household chores and errands. It’s a great way to soak as much info while doing other things.
You have probably heard of SMART goals, which stand for Specific, Measurable, Achievable, Relevant, and Time-Based.
- Specific – It’s a good idea to set goals categorically. Set a limit for how much you can or should spend on each category. When you do this, you are making your budgeting a little more manageable and minimizing the risk of overspending.
- Measurable – You can make a system to determine whether you have succeeded or failed in your monthly goal. It should be easy since you are already keeping track of money. If you spend half or less than half of your monthly budget on dining out, it’s a success.
- Achievable – Make sure your goals are attainable for yourself. It’s okay to take baby steps. By doing it little by little, you’re making it more of a habit, which will set you up for long-term success.
- Reasonable – Make sure that the money you’re earning is proportional to how much you are spending. Financial independence is a big part of every young adult’s life, but be sure you’re not falling into the lifestyle creep.
- Time-Based – Deadlines are super important, especially for short-term goals. Make sure you stick to them. Additionally, you can set long-term goals by spacing them out monthly.
If you are using a smartphone, you can download a budgeting app to your phone. Not only does it help make things more organized, but they’re also almost always free.
The Envelope Method
I picked up this method a couple of years ago, and it has been a lifesaver. The envelope method is helpful when you are having a hard time budgeting. It means that you have an envelope filled with a budgeted amount of cash for every need that you might have, be it food, clothing, or other necessities. Everything that you spend money on must come from the envelope only. If you haven’t used all the money, you can add it to your next monthly budget. Keep your priorities in check the next time you want to spend money on something you probably don’t need.
Dealing with Bad Credit
Anyone can have a bad credit score, regardless of age. However, it seems that young people today have bad credit scores. A poor credit score does hurt your chances of applying for things like credit cards, loans, or even renting your place. You can still get a loan despite poor scores, but it may take a while to find a place that can offer you a loan with your situation.
Luckily, creditloan.com offers bad credit loans for people with poor credit scores. What exactly are bad credit loans, you might ask? It is a personal loan that you can take if you ever have poor credit scores.