It's OK to Hate Budgets
Budgets SUCK...there, I said it. I said what you've been thinking all along, right?
After all, every time someone says, "You need to have a budget," you cringe at the thought of taking the time to write down on paper everything that you've spent, especially when you can't even remember where you spent it and on what!
My usual reaction of frustration and fear around the thought of creating a budget and actually sticking to it was completely changed when I redefined the word "budget" as, "telling your money where to go instead of wondering where it went."
What an extremely different way of thinking of something that represented resentment, restriction and rules. I actually liked the idea of telling my money where I wanted it to go. I had enough practice being confused about where it went, especially shortly after going to the ATM and having nothing to show for it.
Now that the term has been framed differently, allow me to paint an even bigger picture. Unfortunately, no one has figured out how to run a college, company, or even their personal life successfully without a well thought-out plan (that they actually stick to). If you try, you might fool yourself into thinking that you're succeeding, but the house is betting against you, and the house always wins.
The bottom line is, while budgets do suck, spending plans are smart and necessary road maps for you to reach your financial goals, but you've got to take action. Here are a few pointers for redirecting your cash flow and increasing your financial fortune.
Decide what you want. When you know exactly where you want your extra money to go, you'll have all the incentive you need for developing a smart spending plan. Do you want to move off campus in the fall? What about coming up with the cash for a down payment on a car by spring? Or maybe buy that special someone a great gift? They're all worthwhile ways to spend money, but you need to plan for them!
ACTION PLAN: Identify at least three financial goals you'd like achieve before graduating. Figure out how much it will cost to reach those goals, clarify why you want to reach those goals, then begin telling your money where to go!
Know what you spend. Make a list of all your regular expenses, from hair care to cell phone bills, and everything in between. So, if you download music or buy magazines regularly, add them to your spending plan and label them as "Entertainment." Trying to make a purchase and finding out that you have "insufficient funds" isn't cool. Make sure you are aware of your cash (and available credit) standing at all times.
ACTION PLAN: Keep purchase receipts in the same section of your wallet as cash so you'll have a running total of what you've spent and where you spent it. Also, check your bank balance and credit card balances regularly.
Avoid wasting money. I've been where you are. I know how difficult it is to be on your own, away from home, and introduced to a completely new freedom. The thought of putting restrictions on your spending just doesn't seem right, right? Well, daily cups of coffee, eating out and buying snacks from the vending machine can leave you spending more than you need for "convenience" items. If you're hitting the vending machine more than two times a week, you need to make a trip to the grocery store and get your snacks in bulk.
ACTION PLAN: Get serious about keeping your money where it belongs: in your bank account, not someone else's. Commit to eliminating one money waster every semester. Late fees (or worse, automatic charges from Blockbuster) for movie rentals, overdue library books, and parking tickets all stack up - against you.
Even the best laid plans should be reviewed from time to time. You can always make adjustments if your spending plan isn't working for you, but don't abandon ship completely. It's important to remain consistent and committed to having and following your spending plan. Besides, if you skip this step now, you will pay a hefty price later.
So forget about the sale at The Gap and head on down to the campus cafeteria just one more time. You'll be glad you did when you can actually afford to live like a college grad when you graduate. I can tell you first hand that making payments on a maxed-out credit card years after you graduate doesn't give you "good college memories!"
Sanyika Calloway Boyce is the author of four books. She travels nationwide to educate, empower, entertain and enlighten students about money, credit and debt. This former debt-strapped college student shares real and relevant money messages that young adults can relate to and understand. Visit her online today at www.financialfitnesscoach.com.
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