Welcome back, readers, to another year with all of us here at Student Speak! January is all about those New Year's resolutions: going to the gym, getting more organized and trying more new things!
But what about something even more practical and beneficial, like taking a look back at what you did last year and budgeting for an even more stress-free semester this year?
If you read my post about managing your finances and checking yourself, you may have decided to track your spending! If that’s the case, yay! Let’s go start analyzing. If not, that’s okay too—let’s think back to last semester...
Identify points of unnecessary spending
How often last semester did you purchase a coffee or $5 latte before class from the local coffee shop, or pick up a pair of socks at the mall because you know you aren’t getting laundry done this week?
Or bought the $9, two-main, one-noodle combo instead of bringing a lunch?
Did you purchase these things because you were in a rush after hitting the snooze button three times, or was it every Monday before class?
It can be hard to identify a part of your weekly routine as 'unnecessary spending' because we are so used to doing it. A general rule of thumb is if you can make it cheaper at home, it could be considered unnecessary spending (e.g. making your morning coffee from the instant brew and hot water at home as opposed to buying it).
Tally up the weekly cost of these items
Now let’s look at what you spend daily on the items you have identified as unnecessary, and tally that cost up for a week.
- White Chocolate Mocha with extra whip cream: $4.95 x four days a week = $19.80
- Chicken poppers: $5.49 x one day a week = $5.49
- Pizza delivery: $15 x one day a week = $15
- Uber home from school instead of taking the bus: $11.95 x one day a week = $11.95
On average, (possibly subbing out my cheat meals) my frivolous spending totals $52.24 a week, which adds up to over $200 of unnecessary spending a month!
If I stuck with this additional spending, September through December would have seen over $800 spent on unnecessary items. So, what do we do?
Cut your spending in half
It can be hard to break out of a spending routine—especially if you are used to getting a fabulous brownie from a café downtown before class every day—so I won’t say cut out all your frivolous spending. I mean, we get to treat ourselves, right?
However, I can suggest an alternative! Start by taking your weekly frivolous spending from last semester, and cut it in half. Figure out what items you could forgo, or even make cheaper at home!
For the above budget, I would now be spending $26.12 a week, which means less coffee and maybe only going out once for food. Or better yet—I could still have my morning coffee, but switch to homemade instant coffee instead.
By setting a goal for yourself to cut your spending on fun/frivolous things by half the amount, you may be saving yourself the stress later in the semester by still being on track with your finances!
This is not the only way to make a new budget for the new year—we’d love to hear your budget tips and tricks! What are your budget goals?