New year, new costs: Budgeting for 2014
Ringing in the New Year can be
lots of fun, and it brings with it the
excitement of a new semester, new
classes, new goals and resolutions,
and of course, that pesky financial
burden. Maybe you're caught in
the infamous wait for your OSAP
loan to hit your bank account, or
perhaps you're working your butt
off before the semester gets busy
so you can save up for some fun in
a few months.
For the average student, January is a month of extreme budgeting cost-cutting, yet I'm not sure that many of us have ever actually been formally taught any sort of budgeting techniques (unless maybe you're in the Accounting program). Here are a few simple but effective things that can be done to help you get through those financially tight times:
Track your spending. This first step is so important if you want to understand where your money is going. If you want to be able to create a budget, you need to know what you're buying. If you bank online, you'll be able to see what every swipe of that debit card has cost you and where it went. Don't forget to account for credit cards and cash (cash is the hardest thing to track and the easiest way to forget where the money's gone!)
Cut off the fat. Once you start digging into the nitty gritty, you'll see exactly what you bought that you didn't need. I think you'll be surprised how much money trickles away from unnecessary spending. It doesn't have to be big things; in fact, it's usually the smaller purchases that add up — a quick coffee at Tim's, something from the cafeteria for lunch, a snack from the variety store.
It's easy to spend a few bucks here and there because it seems small, but over a month, you'll end up spending a few hundred bucks on insignificant stuff. It's definitely not easy to cut out the extra unnecessary spending; it takes a little time and a lot of effort and self-control. If you always eat at school, my first suggestion would be starting bringing your lunch. Each week, create a grocery list using flyers to find the best prices. Almost every local grocery store price matches, so if you see something on sale at a different store, bring the flyer with you and show the cashier at checkout!
Categorize your spending. Write out a list of expenses and allot an amount needed for each category. First sit down and figure out exactly how much money you have and will make. For those of you on OSAP who only have one chunk of money to work with over a four-month time period, you would likely organize your envelopes to account for expenses from January to April. If you're working to pay your way through school, you would base your system on when you get paid (weekly, bi-weekly, or monthly).
For the month of January you will have X dollars to work with. Now categorize your spending: rent, groceries, transportation, bills (cellphone, cable, hydro, gas, etc.). This is a really simple but effective way to keep track of spending and making sure that you're not going over your budget to. If you can, set aside some fun money for new clothes or a night out.
Budgeting can be rough starting out, but it does become more instinctual the more you do it. You will learn what your weaknesses are and what you find really difficult to control. For example, when my wife and I sat down and did our budget, we realized we were spending way too much on Tim Horton's. Now we each get a set amount on a Tim's card at the beginning of each month, and it helps us to stay on track and not over-spend. We also set up a “savings” account which we use purely for groceries. At the beginning of each month, we transfer over a certain amount of money and that is all we have for the month. It forces us to be more aware and less haphazard about what we're buying.
Of course sometimes things happen and we totally blow the budget in one way or another, but the important thing is not to just let everything go after that. Work with what you have and be smart about what you don't need versus what you absolutely do need.
As students, there are always going to be certain times of the year that are just much harder financially, and unfortunately January is one of them. Check out websites like mrsjanuary.com and smartcanucks.com for further help with your finances. Good luck and happy budgeting!
For the average student, January is a month of extreme budgeting cost-cutting, yet I'm not sure that many of us have ever actually been formally taught any sort of budgeting techniques (unless maybe you're in the Accounting program). Here are a few simple but effective things that can be done to help you get through those financially tight times:
Track your spending. This first step is so important if you want to understand where your money is going. If you want to be able to create a budget, you need to know what you're buying. If you bank online, you'll be able to see what every swipe of that debit card has cost you and where it went. Don't forget to account for credit cards and cash (cash is the hardest thing to track and the easiest way to forget where the money's gone!)
Cut off the fat. Once you start digging into the nitty gritty, you'll see exactly what you bought that you didn't need. I think you'll be surprised how much money trickles away from unnecessary spending. It doesn't have to be big things; in fact, it's usually the smaller purchases that add up — a quick coffee at Tim's, something from the cafeteria for lunch, a snack from the variety store.
It's easy to spend a few bucks here and there because it seems small, but over a month, you'll end up spending a few hundred bucks on insignificant stuff. It's definitely not easy to cut out the extra unnecessary spending; it takes a little time and a lot of effort and self-control. If you always eat at school, my first suggestion would be starting bringing your lunch. Each week, create a grocery list using flyers to find the best prices. Almost every local grocery store price matches, so if you see something on sale at a different store, bring the flyer with you and show the cashier at checkout!
Categorize your spending. Write out a list of expenses and allot an amount needed for each category. First sit down and figure out exactly how much money you have and will make. For those of you on OSAP who only have one chunk of money to work with over a four-month time period, you would likely organize your envelopes to account for expenses from January to April. If you're working to pay your way through school, you would base your system on when you get paid (weekly, bi-weekly, or monthly).
For the month of January you will have X dollars to work with. Now categorize your spending: rent, groceries, transportation, bills (cellphone, cable, hydro, gas, etc.). This is a really simple but effective way to keep track of spending and making sure that you're not going over your budget to. If you can, set aside some fun money for new clothes or a night out.
Budgeting can be rough starting out, but it does become more instinctual the more you do it. You will learn what your weaknesses are and what you find really difficult to control. For example, when my wife and I sat down and did our budget, we realized we were spending way too much on Tim Horton's. Now we each get a set amount on a Tim's card at the beginning of each month, and it helps us to stay on track and not over-spend. We also set up a “savings” account which we use purely for groceries. At the beginning of each month, we transfer over a certain amount of money and that is all we have for the month. It forces us to be more aware and less haphazard about what we're buying.
Of course sometimes things happen and we totally blow the budget in one way or another, but the important thing is not to just let everything go after that. Work with what you have and be smart about what you don't need versus what you absolutely do need.
As students, there are always going to be certain times of the year that are just much harder financially, and unfortunately January is one of them. Check out websites like mrsjanuary.com and smartcanucks.com for further help with your finances. Good luck and happy budgeting!
