A new year is the perfect opportunity for a new outlook, and one of the best ways to begin the year ahead is with a solid plan for your finances. With some preparation and discipline, you can develop a budget, start saving for rainy days, and focus less on worrying and more on yourself, your studies and your bright future!
1. Track your spending
In order to make monetary changes, you must first be honest with yourself about your daily spending habits. A few purchased items here and there may not seem like much, but when you track every expenditure, you can see where your money is actually going -- and the process can be incredibly eye-opening. You simply can't fix what you aren't aware of and, while coming face to face with the reality of your spending may be difficult, it's a necessary step toward fixing it.
2. Pay yourself first
Consider your savings account to be one of the most important payments you make each month. Shop around for the highest-yielding interest rate available to you, and make a commitment to deposit a feasible amount into that account on a regular basis. You can even set up automatic payments to make the process simpler. Watching your money grow is a rewarding way to track your progress as well.
3. Cut unnecessary expenses
Sit down and thoroughly analyze your weekly, monthly and yearly bills. What things can you do without? Which costs can you potentially negotiate? Small bills like magazine subscriptions, gym memberships and extensive data plans for your cell phone may not seem like much, but when you cut these corners, you're essentially building your financial security and leaving more room in your budget to invest in your education and your long term future.
4. Take a tough stance on costly debt
Saving money or even taking on new students loans can feel impossible and overwhelming if you're already facing debt from your past. The first step toward creating adequate savings is typically eliminating any high-interest loans and credit card balances. Consider the snowball method for debt repayment, which consists of focusing on the smallest debt amount, paying it off fully and then applying that payment to the next lowest debt.
5. Halt emotional spending
For so many people, spending money is therapeutic. Whether that therapy consists of online shopping binges or constant thrifting or garage sale-ing, it's important to look at the root causes for your shopping indulgences. If you're an emotional spender, analyze which needs are being temporarily fulfilled by each shopping trip, and look to replace your spending tendencies with a safer, more substantial solution.
Creating a budget and living within its means is an excellent step in the right direction for the new year, and can put you in a better position for paying for your education. These changes require initial sacrifices and discipline, but the rewards it brings are certainly well worth it! For more financial tips and advices, visit iGrad by going to the My Finances page on the Campus Common.