Work On It Wednesday: Building a Budget

 By Emily Young MA ‘16

There are many good reasons to make a budget, one might be that you realized you need to start saving for Spring Break after reading “Is It Spring Break Yet? Why It’s Not Too Soon to Start Planning.”  Allow me to help you on your journey to becoming a financially responsible adult with my personal budgeting tips. 

1. Be realistic about how much time you want to invest in making your budget.

If you want to know exactly to the penny how much you spend on something obscure, say cereal, know that you’ll have to save your receipts and that your budget is going to be a bear.  We’re college students!  Your budget doesn’t have to be perfect down to the penny.  The idea of learning how to budget is to get a month-to-month snapshot of how much you are spending and areas of where you could be better.  

2. Use a method that works for you. 

I like using a simple excel sheet (pictured above) because you can keep the template from month to month. There are plenty of different apps too, or you can even go old school pencil and paper.  It’s all a mater of preference. 

3. Know your set expenses.

 Set expenses are expenses that you must pay every month: rent, utilities, water, cable, internet, parking, etc.  This is the basis of knowing how much money you will need each month.  

4. Know / grow your income.

When you start subtracting your expenses from your income, see step 6, you end up in the red pretty quick if you do not have any income.  Having a little bit of extra income doesn’t hurt.  Here’s a list of resources for finding on-campus jobs: http://ae-www.usc.edu/resources/careerJobResources/Resources-CampusJobs.pdf

5. Calculating your unplanned monthly expenses.

While you could hold on to every single receipt, but I prefer to just use my credit card for purchases and then look at my statement.  It’s easy because it is all in one spot and it takes 3 minutes.    

6. Variance: Are you in the green or the red?

When you subtract your expenses from you income, ideally there should be a positive number, what accounts like to call “in the green.”  If that number is negative, it’s “red” because it’s an expense.   Ideally you would like to be in the green, but if you happen to be in the red, review what happened.  Was it a big event like Coachella?  Did you eat out more?  Then plan to “behave” the next few months to make up the difference.   

Tips for Cutting Back Unplanned Monthly Expenses:

Restaurants:  

• Cook at home more.
  
• Make sure you are using your student discount at local restaurants.
  
• Share meals with friends when you go out.
  
• Suggest a different “free” group activity instead of going out to eat.

 Entertainment:

• Go to free USC events. 
  
• Check out the USC ticket office for discounts.
  
• Ask venues about student discounts.
  
• If you have a big event like Coachella know that you are going to have to limit.
  

Groceries:

• Have a set groceries list or what I like to call staples: milk, eggs, apples, cereal etc.
  
• Go to the store with a list.
  
• Use coupons and buy in bulk when there is a sale.  
  

Miscellaneous:

• Do laundry with a friend. No one has enough whites to do an entire load.Use UberPool……or just walk. 
  
• Put a case on your phone so that you don’t crack your screen.
  
• Sleeping is free, and helps you stay healthy. 
  

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