I’m 19. I make less than $10,000 a year, I still live with my parents during the summer, and the rest of my year takes place on a college campus. I’ve never had to pay a house payment or invest in a 401(k). The money that passes through my hands is very minimal, and making a budget often seems like a waste of time.
I didn't make budgets my freshman year. My dad had taught a financial course to my friends and me the summer before, but after creating budgets for a few months, I stopped. My budgets were never actual representations of the way I spent my money, and what with my course load and other responsibilities, creating a budget never made my top priorities. I assumed that as long as I didn’t overspend, I would be OK.
And it turns out, I was OK for one year. I don’t like to shop, so it wasn’t hard to stay within my means. The problem was, though, since I had no plan for my money, I wasn’t able to save any extra money during the school year. Also, I had no idea how much money I was dishing out to coffee and clothes and other harmless activities.
"So what?" you may say, "That doesn't seem like a big deal." And you're right — my ignorance of where my money was going hasn't made me any less financially secure. But, unfortunately, the habits I form now will stick with me for the rest of my life, and in five or 10 years, the same ignorance will be foolishness, recklessness or worse.
So this year, I'm going to make a change. My goal is to consistantly make a budget every month, to start practicing now the habits that will form my future.
Why should you, a college student or young adult, join me in my decision? Let’s put it this way — money is a resource. Like any other resource, it can be used for good or for evil, wisely or foolishly. A contractor doesn’t build a house without a blueprint. A writer doesn’t whip out a novel without first sketching out a plot. And even the best chefs don’t start cooking until they have some sort of plan for the food. Just as it is with wood and words and food, so it is with money.
Nobody wants to be in debt. We all want to be financially secure so that we can enjoy life and ensure the wellbeing of the people we love. But unfortunately, we don’t have fairy godmothers to grant us everything we wish for. If you need a job, you fill out applications and send in resumes. If your goal is to become fit, then you make a workout schedule. If you want to be free from financial stress, then you make a budget.
The great thing about starting to make budgets now is that it doesn’t take long when you don’t have much money. There are numerous apps and website tools that make budgeting a breeze. Just remember that there’s no such thing as a perfect budget. The first few times — or maybe the first five or 10 — you probably won’t stick to your budget. It’s hard to predict exactly how you should and how you will spend your money. Until you’ve gotten a feel for how much money you need to spend in different areas, you’ll have to guess and try it out. So, good luck, and don’t forget to plan to save and give your money as well as spend it!
