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The first step to budgeting is to outline in a notebook what your expenses are and be as realistic as possible. Allocate amounts towards dining out on occasion or extra travel costs on weekends if that is part of your lifestyle.
Some example expenses include:
- Rent
- Cell & Internet bill
- Food
- Travel
Steps to Calculating Your Budget: Calculate the average cost of what you can afford in each category. Add together each category for your total.
With your total, you will have a realistic monthly spending amount.
Any remaining amount should go towards a savings account.
Savings Goals: Rule of thumb is to always save at least 10% of your income.
If you won’t have an income while you’re in school, factor in 10% of your monthly allocation towards your savings. If 10% is still too high, that’s okay, refer to step 4 of the steps in calculating your budget.
Best Practice with Credit Cards: If you have a credit card it can be easy to overspend by using it for day-to-day purchases or subconsciously wanting to collect points. The best way to manage credit card spending is based on your budget. Ensure you are being mindful of your spending and refer to your statements and receipts if you need to use your credit card.
Warning! Credit cards have a specific system. There is a due date you are given to make your payment. You can pay your entire balance payment or a minimum payment. It is best to pay your entire balance to avoid interest charges. When you do not pay your minimum payment, it puts you at a bad credit rating and if you accumulate debt it takes longer to pay it off as you are paying interest on top of the debt. Being mindful of purchases is key when you have a strict budget!
To learn how to save money and where to get student discounts, check out the video below by the Humber College Ambassadors: