Budgeting 101: Student Life

Budgeting can be hard. There’s guilt with not following your plan, but hey, that list of expenses you taped to the wall was unrealistic to start with right?

The average student debt in Canada is over $27 000 and normally takes about 9-15 years to pay off. That means it’s probably about time that you should start saving money and sticking to a budget. Now, where should you start? There are many aspects to successful budgeting, the easiest being not spending all your money and the hardest being committing to not spending all of it. As your friends in your student debt journey we wanted to give you a couple of tips that you can use to make life a bit easier for yourself:

Wants vs. Needs

It’s important to keep in mind the differences between wants and needs. Do you want to go get some shawarma in between classes on your lunch break? Sure. Should you? Maybe not. Save the $15 and just pack yourself a sandwich. 

This can be a big step, it’s much easier to grab food when you’re out, but it’s not a need. Think about it this way, and I am sure your perspective will change. Think about everything you go to buy as a want or a need. Now we’re not saying don’t treat yourself, you’ve earned it,  just do it within reason. Simple right? 

Shopping responsibly

The reality is that you will spend money. The reality should be that you spend money responsibly. It’s important to keep your eyes peeled for opportunities to minimize the expenditure, I mean who doesn’t love a good sale anyways? Also, keeping an eye out for cash-back offers can be an easy way to make money on things you were going to buy anyways.

Sales are a great way to save money, just buy the cheaper option because once you spend that money, it is gone. You’ll be better off with being frugal ten out of ten times. Now, if you really want something, save up over a period of time if it is a bigger purchase or just wait until it goes on sale. This will make your monthly finances healthier, patience is key… Rome wasn’t built in a day.

Setting aside money

So you just got paid. That shopping spree is looking pretty good right now, but first, pay yourself. You should start a separate bank account that you can’t have immediate access to through a card. Then once you get paid, put some money into that account. That’s it. Most banks in Canada allow you to open up a no-fee account with proof of enrollment in an educational institution. Before you know it, you will have a nice savings account built up.

K.I.S.S.

Keep it simple stupid! I’ve heard it a million times and I am sure you have too. Debt sucks and the only way to get out of it is to pay it off. So, don’t make frivolous purchases and save what you can – remember any bit helps. A great simple budgeting rule was popularized by Senator Elizabeth Warren in her book All Your Worth: The Ultimate Lifetime Money Plan: the 50-30-20 rule. Basically spend 50% of your income on needs, 30% on wants, and put 20% into savings. This simple, yet effective, budgeting method can help tremendously, so remember to keep it simple.

Use budgeting tools

There is nothing wrong with a good ol’ fashioned spreadsheet, or a piece of paper taped to your dorm wall. But, tools like payd app can help complete the process for you so you can save without even having to think about it.

 

These are just some easy steps to getting closer to your goals, goals that are much more attainable than you realize. Keep at it and have fun. Within your budget that is…