“Ponte las pilas!” te dice tu mama right? You should be saying the same about your money. Your money should be working hard just like you are for it and a great place to start is by following the rules to budgeting. I know from experience , what it feels like when money is tight before the next paycheck hits and you can’t go with your amigas. Knowing where your money comes from and where it goes can alleviate the stress of waiting for that next paycheck.
As a college student you may think your only source of income is what you receive from your job, but that might not necessarily be true. You might also receive FAFSA reimbursement or help from family or maybe even a side hustle. Even if it is not money coming in on a regular basis, but you should still budget it! Like You Need a Budget says your money has to be assigned to where it is going. We want to help by offering you 4 easy tips.
Rule #1: Track In-Coming Money
If you receive FAFSA at the beginning of each academic term, allow the college you attend to send the remainder, if you recieve any straight to your bank account. Track the money that is sent to your account as it will cover other expenses such as books, membership fees, or class material fees.
Next, track your paychecks, whether it it weekly, bi-monthly, or a monthly check. Be sure to always check that the hours you worked are accounted for on your paycheck. There can often be mistakes on paychecks, so always review your pay stub before you deposit it or if it is a direct deposit check it online through your payroll provider.
If you receive money from family or even friends (I see you Venmo) track that too! Those $20 your abuela gave you para domingar counts as in-coming money too. The $5 that a friend sent to you for a coffee on Venmo counts as well. Even if your friends are paying you back for something keep track of it so you know exactly how much money you have.
Rule #2: Track Out-Going Money
Now that you know where your money is coming from, track where it goes to. There should be “big categories” you know you have to pay such as rent, phone bill, internet bill, and utilities. Think of these as fixed expenses because they have to get paid at the same amount on a monthly basis. ≈
You then have all the other variable expenses.These expenses can be coffee, restaurants, bar tabs, and make-up. The reason they are variable expenses is because the amount spent varies or changes monthly. You are more in control of how much you spend on these expenses, like getting that hair did or nails done. You can also list these expenses by category (food, beauty, social, ect) and then by where you spent it.
By keeping expenses in two major categories (fixed and variable) and then subdividing them within an excel spreadsheet will help visualize where your money is going. Don’t have one or need help creating one, girl we got you? At the end of this we are including a free Budget excel doc to get you stated, you got no excuses now mija.
Do not forget to include money that you send to friends through Venmo or Zelle! With money sending apps it is easier and quicker to send money when going out, instead of dividing a bill 6 different ways. Include these transactions on the spreadsheet as well!
Rule #3: Balancing Expenses
Now that you have all your expenses on the spreadsheet, you are able to see the total amount spent in each category. From here you can decide where you can cut money out in the variable expenses (remember girl like maybe stop getting’ yo nails done or do it only for special occasions) to be put in the fixed expenses or be put aside for savings. Balance your expenses by cutting down on the variable expenses.
After doing the excel spreadsheet for one month you’ll find that you probably spend $60/month on those latte’s and cold brews (ay dios mio)! For the next month you know to limit your coffee spending to half or less than half or just make coffee at home it will really help you save so much monthly on that cafecito. With the money saved you can put towards something else. Been wanting to save for a car? Vacation? Concert? or put it in a savings to make your money work for you? So many other places your money can go if you were to save, to stop saying you never have money, or that your broke, believe me these small steps will really help you in the long run. Also, by doing the excel spreadsheet you can find where money is going and decide where to cut down.
Also, by cutting down spending on known variable expenses you can put the money into a savings category. Savings category includes 401K, Roth IRA, and an emergency fund. It is important to be prepared for emergencies, as you do not want them on a credit card. Having to fix your laptop (Apple again), fixing a flat tire, or having to pay a parking ticket are unexpected emergencies all which require immediate attention.
Also do not forget to balance your Venmo and Zelle transactions. You paid for Friday’s dinner and everyone (ok mostly everyone), pero pregutanle a Celeste if she still owe’s you remember it’s YO MONAY, record this transaction! Your bank statement may only show for the restaurant transaction, so in your own budgeting spreadsheet record how much your friend’s paid back and if you ended up paying just for your share.
Rule #4: Work Yo’ Money
Another way to budget your money is by following the rules below. Let’s say you work a minimum wage job in LA County and get paid $14.25. You only work part-time an average of 19 hours a week and get paid bi-monthly, your first paycheck would be $541.50. If you work the same amount of hours for the next two weeks, your salary for the month will be $1083. Ahora ya no te sientes tan pobre! It is so easy to go crazy after getting paid, but take a moment to assign pilas to your money. Use the following rule to budget your salary for the month, we know it might take time getting use to but I promised you will thank me in the long run.
Rules
- 15-30% Tax
- 11% 401K
- 5% Roth IRA
- 5% Savings
- 20% Rent & Utilities
- 20% Food & Entertainment
- 4% Clothing
- 5% Emergency
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100% = Salary/month
Of your monthly salary 15-30% of will be taxed. Of the remaining money, deduct 11% for your 401k, it is never too early to save. After each percentage is deducted from the remaining salary, each individual category will add back up your total monthly salary. You now have money in each category to be able to save and spend.
Viendo donde va el dinero is intimidating but do not let that stop you. It will take time to get used to it, but once you start it will be easier to maintain a routine of tracking your spending. Expert tip spending on memories, experiences, and yourself is an investment.
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