Trying a student-friendly budget method

“Money is a tool, not the goal.”
Llewelyn Adams

As a post-secondary student, learning how to budget your money is one of the practical lessons you’ll have to master. More than being a big brain move, budgeting is a practical life skill. If reaching your financial goals is on your to-do list, then that means saving money is your task at hand.

Here at IGNITE, Financial Relief Program and IGNITE Bursary are key services. It can be a tough spot when money presents itself as a roadblock. In response, this aid assures students that they have the extra hand to achieve academic success.

With limited income and high living expenses, managing your money is not as easy as it sounds. I mean, where do you even begin? If you have the same question, then I’m glad you asked!

As a student, budgeting is a lesson I am trying to learn daily. I would not claim I’m the best person to talk about finance. However, I am a person who is up for a challenge to make better money choices every day. So, I’m putting budget frameworks to the test. This experiment is to see how effective it is and gauge its difficulty level in the context of a student.

Enter budgeting!

Two boys sitting on a couch with a text that reads, "what's a budget?" — *Via GIPHY*

The first step to any plan of action is mindfulness. How would you describe your spending habits? A perfect scale is by letting the money talk. All financially-savvy people will tell you their ultimate best friend is their tracker. Typically done through spreadsheets or mobile applications, a tracker serves as an inventory of the ins and outs of your money. After all, financial stability entails financial awareness—a precise reference to the fact that you can’t improve what you don’t measure.

There are a bunch of budgeting frameworks you can choose from—from envelope budgeting to zero-based budgeting. All of these vary depending on the effort you want to put in or the goals you set. One of the most popular is the 50-30-20 budget rule. This method involves splitting your income into three segments—50 per cent for needs, 30 per cent for wants and 20 per cent for savings. With multiple structures to choose from, it’s easy to get lost in what works best.

There is no better way to see what works than giving it a go. Trial and error it is!

My framework

A flat lay with an open notebook where someone writes and compute in a phone calculator, seeming to be budgeting. — *Via GIPHY*

To get me going on my budgeting journey, I challenged myself to track every single cent for the month of December. The mobile application Money Manager is my chosen weapon to make tracking easier. The app saved me time from crafting a personalized spreadsheet by automating the record of my income and expense transactions. This tool has a free feature in which you can keep track of your cash flow, tag each transaction and generate monthly reports. So, whenever I tap my card or receive my paycheck, I make sure to input the numbers into Money Manager.

The 50-30-20 budget rule is also one of my guiding principles. One of the challenges of starting in December is the holiday season. In other words, December is a month of expenses. There are semester-ender celebrations, gift shopping and scheduled holiday trips to the northern part of Canada. Nonetheless, my goal was to save up. At the same time, live in the moment by not cutting back on experiences that must be had.

With this in mind, I tweaked the budget rule to include 40 per cent on necessities, 30 per cent on trip funds, 10 per cent on gifts and 20 per cent on savings.

Remember, you can mix and match your percentages depending on your monthly priorities.

The results

Two pie charts showing a breakdown of income and expense statements. — *Charts by Michelle Marasigan*

Money flowing is one of my favourite things to monitor! Who doesn’t like it?

I am lucky to have my parents cover my rent fee. However, I had to take care of all my other living costs. Knowing that I have a lot to cover monetarily, I also made it a point to keep my money resources up. I’ve made sure to work hard and pick up shifts whenever I can. Thankfully, my two jobs enabled me to balance my budget.

A table showing the breakdown of the December budget with the projected and actual percentages for necessities, trip fund, gifts and savings. — *Table by Michelle Marasigan*

Honestly, I was scared to see my expense chart because I didn’t know how well I did. Going into this challenge, I never trusted myself to reach my goal of 20 per cent savings. Surprisingly, I saved more than my target. Who would have thought? A staggering 29 per cent ended up in my savings pile.

Since I know how much I have already spent, I became more conscious about what I buy. I realized tracking my transactions has enabled me to minimize coffee runs and eating out. I also noticed myself thinking twice when impulsive buying taps me in the shoulder. I’ve constantly asked myself, “Do I really need this?”

A lesson learned

A girl excitedly shakes a small blue piggy bank. — *Via GIPHY*

Ultimately, I was amazed that being aware of your bank account’s daily transactions can help you achieve your financial goals. Tracking my expenses and income every single day has made a difference in how I choose to spend my money. Knowing where I want to be within my number goal made me more deliberate about what goes in and out of my pocket.

I’ve learned that budgeting is not a linear process. I even had days when I would forget to list what I spent in a day. I had to retrieve receipts in my pockets or check my bank app for the correct numbers. But, I thank myself for keeping up with the rules I set. It has kept me in check with my finances on a month that was supposed to be all about spending.

It’s your turn!

An animation of a girl stepping inside a life size purse filled with bank notes and coins. — *Via GIPHY*

No matter your financial goals, budgeting is definitely worth a shot. As long as you have a game plan, you’re all set. All it takes is a specific strategy, a dollop of effort and mindful spending to get you to the finish line. Truthfully, you can never go wrong with being smart about your money.

Let’s face it: there are days when things don’t go as planned. It’s essential to know that help is available when you need it. If you think your situation demands monetary aid, IGNITE is committed to providing you with financial support. The Financial Relief Program and IGNITE Bursary are just some of the available options for short-term assistance to Humber Polytechnic and University of Guelph-Humber full-time students. Check your eligibility today to make sure you qualify.

Whether you want to make ends meet or save up for a rainy day, IGNITE is here to help you lighten the load. Money matters don’t have to be left in the dark. Start your budgeting habit today. Trust me, you’ll pat yourself on the back later.

We’d love to hear from you. How do you budget your money? Share your tips and tricks with us @shareignite.

Feature image courtesy of Michelle Spollen via Unsplash.

Keep your finances on track! Read IGNITE’s article on how to start investing with $1,000.