How I manage my money: Tala, 1829 June 2011
By Tala Odeh
HAVING finished my first year at university, I’ve learned that being a student comes with many new experiences. Doing my own laundry was easy, setting my own curfew was fun, but managing my money was a skill I had to learn entirely on my own.
While, for some, this might come easy, I found it to be the biggest challenge. Why, you ask? Well, let me break it down for you.
Regardless of whether one is financially independent or reliant on an allowance given by their parents, expenses are universal and managing one’s budget is a necessity.
Knowing where you spend every penny, fils or pence can be tricky, as it requires patience and constant care. But, however difficult it may be, it is the first step needed to fully grasp the concept of college budgeting.
Code by colour
When looking over my expenses, I sift through my bank statements and a few months of accounts. When doing this, I find colour-coding and categorising my expenses on a spreadsheet to be a simple and helpful way to map out what I’m spending my money on.
For example, I use different colours for ‘food and groceries’, ‘bills and expenses’ and ‘gifts and personal’.
Step two is also fairly simple: after looking over my expenses and seeing how much I spend in each category, I set myself a limit. This limit is realistic and based subjectively on my own expenses.
At the end of each month, I look over my bank statements and receipts collected when I purchase things by card (to ensure date and costs are correct). I then highlight every expense according to the color codes, add them up and, finally, deduce how much over or under I have spent according to the preset limit. For an example of my three-step process, click here.
My method can be time-consuming and, to some, may seem useless. However, it teaches me more than just budgeting.
Through budgeting I learn discipline and precision when learning how to manage my expenses. Moreover, I appreciate the value of money as a result of constant care when spending.
Do it yourself
Anyone can adopt my method of money management! Remember, though, that everyone’s expenses are different, so use the categories that most apply to you and how you spend your money.
Set yourself a time each month (or week or semester) based on your schedule to review your spending. Be sure to give yourself enough time.
Remind yourself that this is a learning experience, and that it will teach you more than just the importance of money.