“Can I buy the new Smart Phone that just got released last week?”
“Should I go out with friends tonight and spend money?”
“How much money did I spend last month on pizza?”
“How much money can I get by selling last year’s course book?”
Importance of Making a Budget
Many students realize the importance of budgeting only after they’re out of cash, or after they’ve wasted a good amount of money which could have otherwise been spent wisely. Learning the importance of making a student budget and sticking to it early in a freshmen year allows students to be responsible and accountable to themselves for their extra expenditure. When creating a student budget you actually compare your expenses with your income which results in either surplus or deficit of income. If in extremely rare circumstances it’s a surplus, probably there is nothing wrong with your expenses and you are good to go. However if there’s a deficit, you need to cut down your expenses or find out means of earning more income.
Creating a student budget will not solve all your problems, but it will just give you hint of how much you are spending on each of your expenses, where you are spending more and where cost can be saved. Creating a financial budget will therefore give you an indication of your financial health and allow you to create financial stability. Living with a budget is not easy, but that does not mean you cannot do it. Just ask yourself what would you prefer; creating a budget and living with financial freedom, OR living with the guilt of spending credit-card money on something you can’t pay for and later worrying about how you’re going to pay your loan?
Benefits of Preparing Student Budget
Preparing a budget helps you in a number of ways. Following are some of the benefits of preparing a student budget.
1) Cut Down Unnecessary Expenditures
Drawing out a budget also allows you to cut your unnecessary expenses, help you differentiate between your wants and needs, be a smart consumer by spending wisely, stop worrying about how you’re going to pay your credit card bills and loans and thus reducing stress, and so you can live your life being relaxed, tension and guilt free, and with greater overall felicity and sense of satisfaction
2) Save Money
Furthermore, curtailing your expenses will obviously result in less money expenditure which will eventually save you some money you can invest in a bank or keep as savings for big future expenses. Once a student decides to cut down his/her expenses, a lot of time can also be saved by working less and allocating more time to studies and college work. Perhaps this will also result in better grades at a later time.
To sum up, preparing a student budget helps students understand the true value and worth of money and creates strong spending and saving habits in them. It is hence one of the most important skills to be learnt and adhered to which is in fact an investment into your future. So relax and draw the budget now, for it will surely help you in many ways.
Make your own budget using our complimentary budgeting spreadsheet.