I’m not trying to be Dave Ramsey here, but I’ve noticed what seems to me like a FATAL FLAW in most budgeting advice: it doesn’t consider the people who don’t have a “budget” to get advice about, yet! This is ESPECIALLY true of budgeting advice for students.
What I mean when I say that is…take as an example the common advice to save 25 – 30% of your paycheck.
That’s a GREAT idea if you’re an established adult, like a parent starting to build a nest egg for future kids and their college funds…or start saving for your retirement…or to invest…or in case of emergency!
Saving 25% of your paycheck sounds pretty smart, huh? Thanks, money gurus! That’s great budgeting advice for students, right?
Uh…but what about people who don’t have the money to do that?
AKA, most students and young adults?
I mean, not to be harsh but that’s kinda obvious advice, isn’t it? “Save as much of your paycheck as possible.” And yet you see that advice everywhere as if the idea had just now been discovered, when it isn’t really “advice” by itself!! Students are for sure thinking, “Well yeah, duh. If it wasn’t all going towards bills and dead and rent then I totally would do that.”
Sooo I wanted to give some budgeting advice for students, that could apply to EVERYONE…whether you’re already rich (in which case, I’m not sure why you clicked on this article about budgeting, but good for you )…
OR you CAN’T save enough to follow typical budget tips.
Like, “Rent shouldn’t be more than 25% of your income” is another common piece of advice, but if you’re making $7.50 – $10 an hour, then how are you supposed to find a place cheap enough that it means that requirement?
Instead, my advice is to keep budget envelopes!!
If you’re not already familiar with these envelopes, basically what you do is, you label each envelope with a different expense category: “Rent,” “Groceries,” “Utilities,” “Toiletries/Clothes,” “Gas/Car Repairs and Insurance,” “Internet and Cell Phone,” “Fun Money and Entertainment”…and maybe you have a kid, or student loans, and of course you’re gonna need more envelopes!
But the reason I think this method works so well is, you use CASH instead of credit cards, and if you’re lugging this wad of cash in an envelope labeled “Groceries” and then have to physically take the money OUT when you buy the groceries, truly makes you feel the impact of your spending. It’s the perfect way to be more mindful without risking credit card debt.
And hopefully your envelope labeled “savings” can get bigger and snowball slowly over time with these smart spending decisions.
Of course, I know some people are so hard up for cash, they would have trouble filling their envelopes with cash (or a check in the case of rent/bills).
But the point of this is to get used to living with pure CASH because then your spending hits you harder. And if you’re getting spread thin, you might have to take some money OUT of “fun money” to cover an unexpected expense!
Having two girls (oops, sorry, young women…not girls…) who are in college, I want the very best for them, which means giving them REALISTIC advice, not “save X% of your paycheck” without knowing what the person’s paycheck and expenses are!! Good budgeting advice for students is kinda scarce this day and age, but I hope my envelope tip can keep you from “going postal”!