Tackling Personal Finance as a College Student
If you had asked me six months ago what my personal finance philosophy was, I would have laughed nervously and then promptly tried to change the topic of conversation. The truth is, for the majority of my life I had no budgeting skills to speak of. Despite the fact that I’ve had a paying job in one form or another since my sophomore year of high school, compulsive shopping and a propensity for emotional spending meant that I never learned how to actually keep that money in my bank account.
My lack of financial savvy became even worse once I came to college. Surrounded by new friends in a completely new city far away from my native New Jersey, my compulsive spending habits kicked into overdrive. The meager savings I had built up during the previous summer quickly became drained, and checking my account balance became a source of great anxiety.
Thankfully, my life changed this past summer when I discovered the beautiful world of personal finance advice on the Internet. Scouring through posts on sites like The Financial Diet and Broke Millennial, I learned about the wonders of *gasp* not having an anxiety-riddled relationship with money.
By far, the most valuable advice that I discovered was to come up with a realistic budget that works for me. Although there’s no shortage of tips online about how to get your financial health together, methods that seemed to work wonders for others sounded completely unsuited to my own needs and student lifestyle. After a lot of research (I recommend this post if you want to get started!) I decided that a digitized version of the Envelope Method was best for my own lifestyle: after I get a paycheck, I divvy up the total amongst different spending categories, or envelopes, using an Excel spreadsheet that I made. If I want to make a purchase, I have to make sure that I have a sufficient balance in that category; if I don’t, I ask myself if it’s something I truly need, and if it is, I wait until I’ve saved enough to actually buy it.
Although this may not sound particularly exciting, this category-based approach to my budgeting has taken out so much of the anxiety that previously defined my relationship with money. Before, it used to make me so anxious to make big purchases, no matter how necessary, because I hated to see my overall balance go down. Now, I can take comfort in knowing that even if my overall balance fluctuates, the balance of my ‘savings’ envelope is growing, I’ve built up a sufficient emergency fund, and I can actually afford my recreational purchases.
Though there may be some people reading this who have absolutely no need for cultivating a budget or building up an emergency fund, the truth is that the vast majority of students could likely benefit from being a little more cognizant about their spending. No matter where you are financially, I hope that this post has reminded you that it’s never too late to improve your relationship with personal finance!
Written By: Rurie Yi | IQ Magazine Associate
