Start Budgeting Early!

By Author: Anderson Wilson
Total Articles: 17
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If you are still studying and think there is no need for you to plan your budget and believe the responsibility of planning the finances rests solely with your parents, then you need to reconsider! A few mistakes you commit during these critical years might trouble you for the rest of your life.

You should be able to draw out a budget now and follow it even though your payments for college are made by your parents. You can set aside all the luxuries like having an expensive car, clothes, or a stylish mobile or a laptop. This will help you in the long-run.

The right time to formulate a budget plan would be when you are still in college! Step one would be setting up a budget, which is as easy as drawing a timetable for your study. Firstly, you will have to calculate your monthly income; that is the amount you think you will take home once you land a new job. Secondly, you will have to calculate your primary expenses which include compulsory payments and which is not liable to vary. This will include your rent, EMI payment towards a car loan (if at all you are planning), electricity bill and the student loan, if any. ...
... For starters, ideal savings would amount to 10% of your earnings.

Next step would be to calculate your other expenses like groceries, dining out, clothes and other miscellaneous expenditure. This tends to vary and these expenses are within your control! You will get better and better at managing them once you develop a habit of comparing your expenses month on month.

You must learn to control your expenses according to your income. The extra money also could go to your savings. If you are unable to match your income and expenses, you should find ways and means to bring about variation in your primary expenses. For example, you could move into a home with a lesser rent etc.

The important thing is to develop a habit of tracking your expenses. That is, after allotting a certain amount under each expense category you will need to regularly keep a watch over this so that you do not end up overspending. It is better to spend some time everyday rather than to sit at the end of the month to find that you do not have any money left! The periodical watch also helps you to adjust your cash flows accordingly. If you find that an unexpected repair has come up for your car, you could use some money, which you have allotted for your clothes towards the repair.

Once you have followed your budget after making a few adjustments, you have to regularly review this budget at the month end and keep making changes accordingly. In this way, you will also be able to move more money, which is surplus each month to your savings!

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