Living in debt happens all around the US these days. From baby boomers to millennials, about 80% of Americans have credit card debt or a student loan to pay off. Students are particularly vulnerable in the current economic situation, as they do not earn enough to repay their debt in the nearest future. It is also mentally hard to carry the burden of debt on your shoulders because you are young and need a decent education. Managing your budget can be difficult even if you did not take a loan to study. Here are some tips that will help you to stay away from debt in your student life.
Estimate your current expenses
Before you find out how much you should spend, determine what your current expenses are. Try to record what you have purchased in the last two weeks. Categorize your expenses for education, food, transportation, entertainment, etc. After you do that, try to analyze the list. Are your current expenses rational? Is your income sufficient to cover your needs at the moment? At this stage, you can define which categories need more financing. Maybe you require more money for education but you actually spend it on entertainment.
Differentiate between needs and wants
It often looks like we need too many things at a time. Nevertheless, some of these “essentials” are our wants and should rather be optional. Think of things you are saving money for and decide how necessary they are. Will you still be happy in a month after you purchase them? Or are you interested just in the act of buying popular items? Such differentiation will help you understand what is a must and what will become a waste of money in a short while.
Foresee what can go wrong
Even if you have determined all the ways where your money can go, there is a chance of an unexpected emergency. It does not necessarily imply disastrous things, like an illness or job loss. Some mundane events may be a source of unexpected spending as well. Let’s imagine you have not started working on a paper though its deadline is fast approaching. So, you would need to pay a research paper writing service for doing your tasks urgently. Or your car may break down and you will have to spend quite a sum to repair it. Perhaps, you should consider saving some money just in case something like that pops up.
Create a budgeting routine
As you do it for the first time, keeping track of your purchases can seem complicated and time-consuming. However, you can do it on the regular basis without feeling overwhelmed. Download a budget app to monitor your spending if you are a busy person. Or have a notebook where you put down your expenses. It will help you avoid the situation when your money goes away in a few days and you cannot remember what you purchased. Tracking your spending every week, you will become more money-efficient in a month. Also, try not to spend all of your income before a new portion of your salary comes. Save some money for the future so you do not have to borrow it when in need.
Think twice before using your credit card
The situation when you are run out of money faster than expected happens to everyone. And that is not because you buy luxury items or waste your money in any other way. Banks offer us a brilliant solution to that problem: a credit card. No matter what happens, you are always capable to manage the situation with this money. On the other hand, a credit card creates an easy way to be in debt. If you keep using it at all the time, you will soon find out you owe a bank quite a sum. If you need to borrow money, consider doing it from your family. Maybe they will think you are a spendthrift. But even that is better than being in a large amount of debt to banks.
By following these simple tips on a regular basis, you can improve your financial resistance and keep away from unnecessary expenses. Your student budget can be very limited, so taking control of what you buy is essential. Remember that a need is not anything you still do not own. We live in the age of consumerism, and the value of things is often overestimated. Think of that when planning to make your next purchase.