How To Start Organizing Your College Finances
Its 2016 and in honor of the New Year, we dedicate this blog to the subject of getting your finances organized. Yes, budgeting and saving your money are very important to your financial success and well-being, but if you don’t take the first step of understanding where your finances lie you will not be able to budget or save properly now or in the future.
We understand that sitting down and figuring out where you stand financially can be quite daunting and scary. But think about it this way: becoming financially aware is the first step to becoming financially successful in your life. It’s one small uncomfortable step in comparison to a new world of financial stability.
The first steps to becoming financially aware:
1. Total your monthly income
We use monthly income because it is easier and less stressful than calculating your yearly income. The first step in becoming financially aware and ensuring future financially stability is knowing your income. Begin by writing down ALL aspects of your income. This includes but is not limited to money you receive from financial aid organizations, loans, parent contributions etc.
2. Calculate your monthly expenses
When calculating your monthly expenses, you need to separate them into two categories, fixed and flexible. Fixed expenses are costs the stay the same month to month. These include rent, tuition, car payment, utilities, any loans you may have, etc. Flexible expenses are costs that change month to month. These include entertainment, school supplies, groceries, material items, etc.
Calculating your monthly expenses may require you to track them over time. We suggest that you track your expenses for about a month to get an idea of how much money you are spending. An easy way to do this is to write down how much you spend and what you spend your money on as you go. This way you will not lose track. There are many apps and internet sites that are designed to help people easily track their expenses. Mint is one of our favorites. Additionally, doing things like looking at your credit card transaction history, keeping receipts, or simply keeping a notebook with you and writing down how much you spend are great ways to track your expenses.
Becoming financially aware will take just a little bit of time and effort,
and we promise, the rewards will make it worth your effort.
After this first month of tracking how much money you earn verses how much money you spend, you will have a rough idea of where you stand financially. Continuing to track expenses is important to obtaining and maintaining financial success. After a couple months of tracking your expenses you will start to understand your spending habits. You will be able to see the areas in which you need improvements, and the areas you are excelling in financially. For example, maybe you notice that you save money really well until the end of the month, and then spend too much on expensive dinners, or that you have a problem spending too much money every time you get your hair cut. Maybe you spend more money during the first of the year than you do in later months. Or you may learn that you are great at budgeting in every aspect except when it comes to groceries.
The above list are examples of how simply tracking your spending and examining your finances over the next few months can painlessly take you to the next step in becoming financially stable, budgeting and saving your money. Once everything is out in the open, you will know how much money you are working with, and you will be able to facilitate change. Just remember, even small changes make a difference over time.
Stay tuned for next months blog article, in which we will be discussing budgeting!
Additionally, if you are a student at the U and feel overwhelmed with examining and tracking your finances, give our office, the Personal Money Management Center, a call or come in to set up an appointment! We give free one on one financial counseling advice to students, faculty, and staff members of the University of Utah. Our financial counselors have expertise in many different areas of finance, including saving, budgeting, student loans, and credit, just to name a few. We are always here to help.
Until next time, Stay tuned and financially aware!
Personal Money Management Center
University of Utah
Olpin Student Union, Rm 317
Phone: (801) 585-7379
Fax: (801) 585-7888