Some people prefer to keep track of their expenditures by creating an informal "spending plan", while others like to see exactly where each dollar is going by using budget worksheets in Excel or services available online. We want you to start utilizing one or more of these strategies early so that budgeting and conscious spending become habits, but we recognize that each individual has different needs and wants and thus very different spending habits. Here's an overview of some of your options:
1) Create a "spending plan."
Spending plans provide more flexibility. Instead of creating an itemized worksheet with planned expenditures, you would decide exactly how much of your monthly income you can spend. For example, if you have $500/month to spend on all of your needs and wants, and you drops $300 on a video game system, you are still technically within your spending plan. However, the remaining $200 must be stretched in order to pay for groceries, entertainment, bills, clothing, and other surprise costs. If you do keep a spending plan, ensure that your needs are prioritized before you spend. This option is beneficial to those who do not have expected expenditures, but instead encounter surprise costs or changes in the amounts of their expenditures each month. Spending plans can become troublesome if you are not mindful of where your money should be going.
2) Use a customizable budget worksheet.
If you've looked into printing budget worksheets before, you've probably noticed that many of them contain categories that are not necessarily applicable to the typical college student or recent graduate. You should still plan to use a budget worksheet, however, it is best to find one that can be customized to fit your needs. A worksheet you can open in Microsoft Office, Open Office, or Mac client works well and we prefer Vertex42.com's Customizable Excel Budget Worksheet. If you find categories that do not apply to you, simply click on the row number (hold Ctrl to select more than one), then select to hide those rows.
3) Load up gift cards with your budgeted amount for particular expenditures.
If you plan to spend $150 per month on groceries, you could purchase a gift card from your favorite supermarket or grocer for that amount on your first trip. This technique is useful to those who would rather not keep tabs on their finances with every expenditure. If you want to budget yourself $20 per month for going to your favorite coffee shop, you can purchase a gift card as well. Then, when you run out of money on the card, do not let yourself spend your cash! This technique will keep you within your budget and you'll rest assured knowing that money is already set aside for your needs. Be sure to keep reloading the same card, however. Businesses make a ton of money off of the pennies left on used gift cards and you can always roll that $0.11 over to the next month.
4) Use an online spending tracker.
Many banks that offer online banking will create statistics of your spending in graphs. The problem with these, however, is that some of your purchases with your debit card are not recorded in the proper category. For example, after loading $10 onto my Charlie Card, my bank categorized the spending as "Food/Dining" because the entry was titled "Subway". I was not able to edit the category, so my spending graph was not completely accurate. Mint.com partners with banks to grant them secure access to your accounts, and they not only compile more comprehensive data, but there is also a feature to edit categories. Useful, right? Mint is great when used in conjunction with a spending plan and/or a budget worksheet.
Happy budgeting,
Savvy Student
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