When most students (and everybody I am guessing) hear the word budget, I am guessing it is considered a chore, or a much stronger word if you are thinking it and not saying it, or if they are alone. But there is no need for a student budget to consist of every little expense they may have, it does not have to take more than 5 minutes.
I personally do almost all my banking online. The only reason I ever go into a branch is to make deposits, which is why I like going to the bank, or if for some reason I need cash and do not have any. So I can log into my bank’s website and see how much money I have, 24/7. If you do not have online banking this method may not be the best for you. Side note, online banking is awesome and makes lots of things easier.
Now, here is the way to quickly budget.
1) After you work all summer and are preparing to go back to school, check how much money is in your account. I am hoping it is a big number, I am not one for schadenfreude.
2) Subtract any money that you would like to keep in your account. This could be money needed to maintain a minimum balance in your account like some banks require, it could be money you are saving for a trip on Christmas, spring break, or in the summer, or it can just be the amount of money you need to have to be comfortable with your finances.
3) Add any money you expect to earn from a part-time job. Use the rough calculation of: number of hours per week X (minimum wage – $3 for taxes and deductions). The $3 is a conservative number so that hopefully you end up with more money than you guessed.
4) Take the number acquired by the first three steps and divide it by 12.
This is the amount of money that you can spend each month simply from the money you earn. If you are lucky or hard-working this number will be generous and you won’t need to spend that much. If you are unlucky or among the majority this number will seem low and it may take some scrimping to keep to the budget.
When I make approximations I always try to err on the side of caution. This way any surprise will be a joyous one. As you can see the budget above is very rudimentary. This is deliberate so that hopefully you live below your means and that you end up with more money than you bargained for after the year is over. The calculations do not include your tax return, any gifts, etc.
Unfortunately this also does not include large one time costs such as tuition or any other costs associated with school. This is the downfall of such a simple solution to a difficult problem.
Then once the year is over, because you allocated all your money over 12 months, you theoretically should be able to save every penny you make during the summer. Then you can repeat the process the following September. Ideally the next monthly budget you have should be higher than your first one. That is the plan anyway.
You can make sure you are sticking to the budget by checking your balance online. There is no need to hold on to receipts. Just go online and subtract your monthly total from the amount of money you figured you could spend. Your balance should not be lower than that number.
There is no need to spend all that you allotted to a month. Learn to stop spending money needlessly just because you budgeted it. If you are having a good month it is even better to save the money you didn’t spend for that month. Any extra money you have will do much better for you if invested. In a perfect world you would also subtract an amount of money that you want to invest from your money at the start of September. But I know that can be tough. So for the time being just save any money that you have leftover.
There you have it. Very simple, very imperfect but I feel like this is a pretty good solution to something which otherwise would be very unpleasant. Even this may be unpleasant, but for the whole year it should not take more than 90 minutes assuming five minutes at the end of the month to check your balance and 30 minutes to do the original calculations.
A budget is a very agreed upon way to make sure you do not spend more money than you have. Spending less than you can is an agreed upon way to have money. So a budget should help you have money.