Fall semester is right around the corner! The start of a new school year and a new semester can be seen as a fresh new start. With a new start comes new opportunities to take control of your finances.
Where Do I Start?
You may be asking, what’s the first step? What we would recommend you to begin with is setting up a financial gameplan, a budget! There are so many budgeting methods out there. If you prefer to pay for your expenses with cash, the envelope method might be great for you. Another option is the 50/30/20 rule. With this rule, 50% of your income is allocated towards your needs, 30% is allocated for your wants and the remaining 20% are allocated for savings or debt repayment. An additional great option is the zero based budgeting method which ensures that every dollar of your income has an allocated category. These budgeting methods are just 3 out of so many possibilities. If you have a specific budget in mind or want to discuss your options, feel free to schedule a free coaching session with one of our bobcat financial coaches!
Useful Habits
Setting up a budget is simply the first step. In order for your budget to be effective you need to implement useful habits. The start of the semester is a great time to begin creating financial friendly habits.
Once your budget has been created, it is vital to track your expenses. Successfully tracking your expenses can be done in a variety of ways. Some prefer to categorize all of their transactions on an excel sheet, others rather write their expenses on items such as a notebook and some simply use their mobile banking app. The most common and easiest way to track your expenses is via your banking app. Most banks have a spending tracker in which your expenses are categorized. Most apps let you set a limit for each category so you can easily check your progress throughout the month. If your banking app does not offer a feature like this, a great alternative is the Mint app which simply does the same thing for you.
If part of your financial game plan is to save or build an emergency fund, it is recommended to set up automatic deposits. Automatically depositing into your savings account every pay period is an amazing habit to implement. These deposits can be as little as 5% of your paycheck. With having a portion of your paycheck go into your savings account, you will be saving without even realizing! In addition, the temptation to spend that 5% will be eliminated, being that it went directly to your savings account and never reached your checking account.
One of the most crucial habits to develop is to allocate time for your budget on a monthly basis. Set a specific time of the month in which you sit down and look at your progress. This can be done at the end of the month, in which you can look over your expenses for that month and prepare/plan for the incoming month. This can also be used as a time to be proud of yourself for making a continuous effort to stay on track with your budget.
We Have Your Back!
Budgeting can be scary. Not only can it be scary, but it can also be extremely challenging. If you find yourself curious or in need of any resources, consider scheduling a one on one coaching session! Now is the perfect time to begin your financial game plan and we are here to help you. Goodluck Bobcats!
Author:
Melissa Rodriguez
Bobcat Financial Coach
Melissa is a Bobcat Financial Coach alumna at the University of California, Merced. Read more about her here!
