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Financial Literacy: Budgeting Basics

A guide to financial literacy for students

How to Create a Budget?

Image Source: Call Federal Credit Union

  • Calculate Monthly Income: Start by identifying all sources of income, such as allowances, part-time job earnings, or scholarships.
  • List Monthly Expenses: Categorize fixed expenses (like rent and tuition) and variable expenses (like groceries, transportation, and entertainment).
  • Set Spending Limits: Based on your income and expenses, set realistic limits on each spending category.
  • Track and Adjust: Use either a manual tracking system or a digital tool to track expenses, and adjust spending if necessary.

Sample Monthly Budget (Monthly Income: $500)

  • Fixed Expenses: Phone Bill ($50), Subscriptions (Spotify, Netflix) ($20)
  • Variable Expenses: Groceries ($100), Dining Out ($40), Entertainment ($30)
  • Savings/Investments: Checking Account ($50), Investments/Long-Term Savings ($50)

This budget allocates funds across essential categories, ensuring that income is effectively distributed to cover both immediate needs and future financial goals. Adjustments can be made based on personal priorities and changing circumstances.

Budgeting Tools and Apps

Several budgeting apps can simplify the process by automatically tracking your expenses. Some highly recommended options are:

  • Mint: Connects to your bank accounts to track spending automatically.
  • YNAB (You Need a Budget): Focuses on proactive budgeting to give every dollar a purpose.
  • Goodbudget: An app based on the envelope budgeting method, ideal if you prefer to limit spending in each category.
  • PocketGuard: Helps track spending and shows how much disposable income you have left after bills and necessities.
  • Zeta: Designed for students or couples managing shared finances, with tools for splitting expenses and setting joint savings goals.
  • Fudget: A simple, no-frills budgeting app that lets you track income and expenses without linking to your bank accounts.
  • EveryDollar: Uses zero-based budgeting to allocate every dollar toward expenses, savings, or debt repayment.

These apps allow you to view spending patterns and set alerts if you're close to overspending in a particular category.

Tips for Managing College Expenses

Consider these strategies to save money while in college:

Cutting Unnecessary Costs: 

  • Cooking Meals at Home: Preparing your own meals can save significant money compared to dining out. You can focus on easy-to-make, budget-friendly meals like pasta, stir-fries, and casseroles. Cooking in bulk and meal prepping for the week can also reduce food waste and prevent unnecessary last-minute takeout orders. 
  • Student Discounts for Centre College Students: Many local businesses and national chains around Danville offer exclusive discounts for Centre College students, so it's worth asking about student deals when you’re out shopping or dining. Here are some examples of the types of discounts you may find:
    • Local Cafes, Restaurants, and Retail Shops: Many of these places around Danville such as Daniel's Poke and Ramen and Still Cuttin Up offer student discounts, typically ranging from 10-15% off when you show your student ID. It's a great way to save on daily and occasional expenses.
    • Entertainment Venues: Movie theaters, concert halls, and other entertainment spots often offer reduced prices for students. Whether it’s a movie night or attending a local event, these discounts can make leisure activities more affordable.
    • Online Deals: Don’t forget to check for student discounts on websites too, such as Amazon, Apple, and other retailers, which offer deals on electronics, textbooks, and more.

 

Setting Financial Goals: Clear financial goals provide motivation and direction for managing your money. Examples of financial goals include:

  • Building an Emergency Fund: Set a target to save $500 or $1,000 to cover unexpected expenses like medical bills or car repairs.
  • Paying Off Debt: If you have credit card debt or student loans, set a goal to reduce the balance by a certain amount each month or save for future loan repayments.
  • Saving for a Vacation: Planning a trip? Break down the total amount you want to save and set a realistic target, like saving $50 a month for six months to reach your goal.
  • Investing in Your Future: Whether it's for books, online courses, or attending events that could benefit your career, setting aside money to invest in yourself can be a smart goal.

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Contents repurposed from Tyler Smith’s Budgeting Guide