“I was that student - very shy and nervous to meet new people - I kept my door closed and wasn't very involved outside the classroom when I first got to Curry. But at some point, I made a conscious decision to get out of my comfort zone and started making things happen.”
Christine Nguyen '15
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- Manage My Money
Manage My Money
What is Budgeting and How Does it help me manage my money?
Creating a budget helps you ensure you don't spend more money in a week or month then you actually have coming in to your household. It also helps you review where your money is going (expenses) and it offers you a way to make a plan to save for something you want like a car or home. A budget is a planning tool and it offers you a great way to evaluate your financial situation. The process involves listing all sources of income, and then subtracting all required, fixed expenses ( like a car payment - a set monthly pre-determined cost) and unfixed expenses (things you aren't billed for regularly like your daily coffee fix) and then possible future expenses (such as a mortgage).
Additional information regarding budgeting is available on the U.S. Department of Education website.
Why are my spending habits important?
Before you can create a budget, you need to identify how you are currently spending your money and be able to prioritize your spending patterns.
To get ready to develop a budget, you need to do the following exercises: Track by keeping a list either on your computer or on a piece of paper, everything you spend during the month no matter what it is (include personal necessities you purchase like toothpaste and shampoo), your monthly bills (such as your monthly student loan repayment amount and your cell phone bill) and what you spend for fun (the total cost of movie night including the tickets, popcorn, the drink to wash it down with...you get the idea) etc. Once you have a month of expenses, you can complete the next exercise: split that list into necessities and luxuries. Examples of necessities are groceries, gas, rent or mortgage and any other regular monthly bills you have. Examples of luxuries are going to the movies, coffee from the gourmet coffee house and eating meals out.
Why Save My Money?
Now you know what you have for "disposable" income (money you have available after necessities to spend how you want), you need to decide how much you are willing to put away for future emergencies (for example, your car breaking down and needing repairs) and how much you can afford to put away toward the "big purchase goal" you have in mind like your first home.
There are multiple ways for you to save for your future and you are encouraged to explore each so you can make a choice that is right for you. Each option has its own pros and cons, depending on your overall financial goals.
Savings accounts offer low interest rates but they are easy to maintain and your money is pretty accessible if you need to get to it. Certain banks offer checking accounts which earn low interest on your balance and you easily can write checks to creditors to pay off bills.
A money market account offers a floating interest rate based on the changes in the global financial market. This type of account usually pays a higher interest rate than a savings or checking account but often requires a minimum monthly balance be maintained thereby tying up a portion of your money making it unusable.
CDs are savings vehicles that guarantee principal (the original amount you placed of your own funds) and provide a fixed interest rate. CDs are invested in for a set amount of time, such as 6 months, 12 months, etc. If you withdraw your money before the maturity date, you are charged a penalty.
Keeping a budget while in college can help you meet personal goals such as reducing your debt, building your savings and allowing you to be better prepared for unexpected expenses and emergencies. Its purpose is to help you live your life while building financial security and creating a clear picture of your finances.