It is really easy to find ways to let money slip away. It is easy to take a look at your paycheck and associate that with spending money. A couple bucks here for that specialty Pop-Tarts flavor and another couple bucks there to go to Washington, D.C. with your wing. That's when life gets expensive. Suddenly, you have to go to urgent care or your car breaks down with no money to spare. You don't want to be in that position.
Several PHC administrators and one off-campus junior give their advice on how to avoid being in a situation where you cannot pay off your expenses. Here's a few tips:
1. Always Be in a Saving Mode
Getting into the habit of saving is an important life skill. Students should be setting aside a portion of their paycheck every month for emergencies. Unexpected expenses can add up over a semester, especially if you own a car. Junior Mary Muncy suggests adding to your emergency fund every month until you reach your pre-determined goal. The Vice President of Advancement, Tom Ziemnick, suggests to make your emergency fund big enough to last 3-6 months.
One of the best ways to save money is to have your employers directly deposit a portion of your paycheck into your savings account. Depositing money into your savings on auto-pilot is a really helpful way to save money. Saving happens in the background so you are less tempted to spend more than you normally would.
Be aware of pending charges in your checking account, warns Janet Low, the former Director of Human Resources and Payroll. Do not assume that the balance shown in the overview tab of your bank account is what you have. The biggest threat to saving is spontaneous spending.
2. Make a Budget
Meeting your monthly expenses can be tricky when you are unsure of how much you earn on a monthly basis and how much your expenses are. Making a budget can help you to visualize exactly where your money goes and what actions you need to take.
In order to make a budget, you need to track your expenses. Tracking your expenses helps you recognize bad spending habits such as spending more than you can afford. There are hundreds of financial tracking apps available for your phone if you want to use an app. Muncy recommends one called Every Dollar. The more traditional route of tracking your expenses is by making a spreadsheet. Both Google Sheets and Microsoft Excel offer templates to streamline the process.
The goal of budgeting is to ensure that you are not spending more than you make. If you consistently spend more than you make, then that should be a sign that you need to alter your spending habits or adjust your work commitments.
When you're making a budget, it is important to remember the hidden expenses. For example, if you own a car, your budget should include car insurance, gas, and anything that could break down. When people come to college, they often plan for tuition, dining, housing, and books but forget about printing and laundry fees.
Remember that your financial situation can change in the future. Job security can change if the economy does. As a result, have a back up plan to get yourself back on track if something unexpected happens.
3. Remember to Tithe
Christians ought to tithe to the church and Christian organizations which follow the will of God. It is important to remember that everything belongs to God and everything is for His glory. With money, it is easy to forget that it belongs to God since it seems like we generate our income.
Traditionally, Christians donate 10% of their income. While this is a great starting point, the number does not matter. Giving is dependent on the attitude of the donor. Ziemnick advises to pray through your money. The Lord may call you to give more than you think you can give. If He does, it is important to remember that God is a provider and we should not worry about financial shortcomings.
It is important to make a plan, but God has the master plan.
4. Use Your Credit Card Sparingly
Using a credit card responsibly is one of the most beneficial life lessons that students can learn. A good credit score helps you to buy a car, a house, or any other big milestone type purchases. However, credit card spending can spiral out of control easily.
One of the most important principles of using a credit card is to pay off your expenses at the end of the month. If they are not paid off by the end of the month, then interest accumulates and it is harder to pay it off.
Because credit cards can be hard to pay off, it is important to be aware of the expenses you put on it. Students ought to use credit cards mostly for small purchases. You can use for emergencies, like going to urgent care, if no other option is available.
If you have never been financially responsible for anything before coming to college, the world of finances can be exhilarating and daunting. It is important to learn about the basics of financing before something bad happens, like credit card debt.
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