How many times a week have you said to someone or even thought to yourself, “I need to start saving” or “I should really open up a savings account.” You might find yourself thinking this quite often…I know I do.
As a young adult going through college with a full course load, extracurricular activities and trying to manage a few different jobs, I have found that money can be a very hard thing to handle. At this time in our lives, most young adults want to begin to handle their own financials to lead a more independent lifestyle. This may be easier said than done however.
So what can we do about this?
Let’s start with the basics!
Figuring out how to manage a full schedule AND your finances can sometimes be frustrating. In the past year, I have found that these tips have helped me with my budgeting:
1. Research banking options, ATM’s, fees, services and debit cards. Find out which bank is good for your personal finances. Are you traveling a lot, or do you live locally most of the time? This might guide you to choose if you would like to put your money in a local bank or one of the big names. Be sure to research all your options by looking online or talk to numerous bankers to find what is right for you. Here’s a good resource from NerdWallet:
2. Try to distinguish your needs from your wants. We all know about those shoppers that go into a store to buy a simple need and end up coming out of the store with many wants. Make it a habit to limit yourself to what you came to the store for. A good way to accomplish this is by creating a list, and sticking to it. Although it may be tempting, it can only help for your future!
3. Keep a running list of what you spend each month. Doing this will help you figure out how much you need to spend and how much you can in turn save. It can also give you a bit of leeway to spend on yourself or others! A simple chart or table that details all expenses will help to facilitate and manage an effective budget. Here is an example:
4. Build up your emergency fund. It is always good to have a safety blanket to fall back on just in case. Throw in a few dollars a month into a savings account that you don’t have “easy” access to, so you are less able to dip into when cash is tight. This empowers you to save for times when you may really need it! An emergency fund with three to six months’ worth of expenses is a good starting place.
5. Save just as little as one dollar a day. Saving even a small amount each day or week can go a long way. Rather than getting that extra cup of coffee at Starbucks, try to save that money in your savings account.
For example: Let’s say you go to Starbucks 5 days a week and get the same medium coffee that is $2.45. The data below shows how much you would be spending each month. You can see that just $12.25 a week goes a long way.
Taking control of your budget is key to building a sound foundation for your personal finances. When thinking of the word “budget,” don’t think about it in terms of deprivation. Think about it as a way of nurturing yourself and your future self. Creating a financial plan will allow independent, young adults to lead a pathway to success! So always remember, a dollar a day keeps the budget in shape!