As we learned in Student budget tips – part 1, creating a road map of expenses and resources can be a huge step towards making your money last the school year. The second challenge is actually sticking to your student budget.
Here are some spending strategies to help keep you on track.
1. Have an emergency fund
The emergency fund tends to get a bad wrap, but life never goes exactly as planned and unexpected expenses almost always come up. Your printer needs a new ink cartridge, your car needs a repair or something you lost needs to be replaced. For peace of mind, set aside a little extra each month for emergencies. If it’s not needed that month, carry that amount over to the following month.
2. Leave the card at home
Browsing with a credit card can be dangerous. If you’re browsing without a specific purchase in mind, leave your credit card at home to avoid impulse buys and increasing your cash burn rate. If you see something you like, put it on hold. And when you get home if you still really want it, you can always go back and purchase it. But if you get home and have forgotten about it, you’ve saved yourself an unnecessary expense! When it comes to debit card vs credit card, it pays to be smart about when to use each payment type and to understand the differences between them.
3. Avoid bad bar behaviour
Never ring up a bar tab. It can be hard enough to balance your budget without a little alcohol impairing your financial judgement. Running a tab at the bar makes it all too easy to drink more, not to mention buying rounds for both old and new friends. Remember what happened to this team after beating a certain Vancouver one for the Stanley Cup in 2011? A bar bill at the end of the night can be a very sobering experience.
4. Prioritize your purchases
We can all think of things we want to buy or things advertisers have convinced us we “need.” But those usually far exceed what we can afford on a student budget. Each month, make a list of things you want to buy, then rank them from 1 to 3:
- 1 = essential to buy now.
- 2 = need to purchase, but not right away.
- 3 = would like to buy, but don’t really need it.
Start with buying your items ranked number one,and if there’s money left, perhaps buy your most needed number 2 ranked item(s). At year-end, if there’s extra money left treat yourself to one of the items ranked number 3 on your list.