After graduation I took a trip with my friends. The trip was immense fun but it wasn’t fun when I did the expenses. When I sat down to settle the trip bills, I knew I had to be stricter with my finances. Here’s a plan I made for myself and it has continued to help me to stay on track. I hope it helps recent graduates like me.
Make a budget for variable expenses: We all have expenses that are fixed- rent and bills. But expenses such as food, laundry and other personal expenses can change. Set a budget for such variable expenses.
Track your expenses, ALWAYS: if you don’t know how much amounts to your variable expenses, track them for previous months. You are sure to come to an average amount. Then set a ceiling for how much you should spend on them and stick to this number rigidly. Don’t give up tracking. Always track your expenses.
Avoid swiping your credit card for lesser amounts: pay by cash or use your debit card to pay for smaller amounts. Smaller amounts like the 10s and 20s amount to quiet a big number on your bill. It feels good to get them out of your way when you pay by cash.
Start cooking at home, because that is much cheaper than eating out every day. And it can save you a lot of money.
Avoid eating out as much as possible. Need I say again that it can save?
Say no: you don’t need to always catch that flick with your friend or go out every weekend for dinner. It is difficult to say no but your friends will understand.
Pause before you shop: Before you are ready to swipe your card, ask yourself if you really need the item you are buying. Can you do without it? If the answer to this question is ‘yes’ you know what to do. Few days back I was in BJs doing grocery shopping. I picked up a lovely winter jacket which was costing only $30. I was tempted to buy it. I roamed the entire store with it in my cart knowing I shouldn’t buy it. Eventually I put it down and bought only the required groceries.
It can be difficult to curb yourself from shopping in the beginning. But after you see the difference it makes it isn’t that difficult. All the best!