A dollar saved is a dollar earned. Hit the million by keeping it.
So you think the secret to becoming a millionaire is to pursue an MBA for the highest-paid job on Wall Street?
Well, sorry to say…you got it all wrong. Dead wrong. You might as well be given a million bucks today, but that still doesn’t qualify you as a millionaire.
What makes those folks part of the top 1% enjoying their lavish lifestyle is the attitude. The attitude of keeping that million in the bank.
Think you’re starting to get it now?
As a student, let’s go over four ways to confirm if you are on the right track with saving and budgeting your money in college.
Run an Actual Budget
Sometimes, all it takes is a little self-discipline.
Overspending is often led by the lack of a plan to allocate your income. It is simple math really: money in, money out, and the numbers never lie.
Here’s how you can set up a smart budget:
If you know your income amount that will be coming in, go ahead and budget your spending before payday. Your decision-making strategy is more objective now than later once the money is in your account.
– Food: $150
(Have a look at your past spending and establish an average amount that you meet every paycheck. The goal is to keep it as low as possible, but not to the point of starvation.)
– Entertainment: $100
(Subjective to your lifestyle. Remember, you are a student, not the Kardashians or Dan Bilzerian.)
– Transportation/Bus: $50
– Household Expenses: $50
(Everything related to hygiene and maintenance: oral products, cleaning supplies, etc.)
– Rent: $500
– Readjustment: None
(Optional: Any adjustment of the calculation made if the amount could not cover the normal cost. For example, if you were $50 short on paying for food, mention that you took that amount out of your in my entertainment budget. This serves as an indicator for future budgeting.)
– Savings (to be placed in your emergency fund): $1000 (Income) – $850 (Expenses) = $150
Budgeting represents 80% of the work to save up money. Not only does it allow you to see where the money goes, but it also gives you “no surprises” whenever you check your account balance.
Buy Used Before New
In the market for a car? Forget the new car smell!
You, my friend, are a student – and simply cannot afford to buy something that loses up to 30% of its value the moment it leaves the parking lot (unless of course, you’re one of those trust-fund babies…in that case, we aren’t talking to you).
Be smart about this, and don’t buy into those spendthrifts who make such reckless decision.
Most of the time, used items work just as good as new but at a fraction of the cost.
Here are a few tips on buying used items:
Furthermore, buying used is definitely the strategy to adopt whenever you buy textbooks; they’re obviously cheaper than new, and you can resell them after the semester for nearly the same price.
Sunday Weekly Meal Prep
Food is the real money pit. With the right amount of discipline, this is the portion of your budget that has the biggest impact on saving.
It is far too easy to stop by the nearest food court on your campus or dine out and pay $10 for a meal, which expensively adds up.
How do you save big on food?
This literally avoids eating your cash away and having to settle for ramen noodles two days before pay day.
Cut Cost for Accommodation
As a rule of thumb, 50% of your budget should be set aside for rent. If you are above 50%, then you’re living beyond your means.
You should definitely act now because reducing your housing cost takes time.
Leave that overpriced one bedroom nearby the campus to someone else and save big on your housing rent. The lower it is, the better.
Read up on any advice of your favorite wealthy individual in the world, and you will notice that every one of them has the propensity towards saving. It is one thing to have the highest-paying job in town, but it is something else to stay the richest in town.
And that starts with saving your money.
Do you have a saving strategy of your own? Share it in the comment section below!