Ever get to the end of the month and wonder where your money went? Being in college offers not only the opportunity to become financially independent, but it also brings opportunities to squander your money away. In our society, many social events are centered around eating and this holds true on campus as well. However, spending money on eating out can be just as unhealthy as the food you get when eating out. Two ways to begin exhibiting better money habits are by going on a financial fast or starting a financial diet. Both require you to differentiate between needs and wants and can help you begin to understand what to spend money on and when it may be better off saving.
Financial Fast
A financial fast is a shorter but more intense way to kick-start better money habits. The financial fast lasts 21 days and limits your spending to only the bare essentials to living. Items considered essentials include bills (i.e. rent, utilities, etc…), gas to get to and from school or work, groceries meant to sustain your body (i.e. not chips or soda), and medications. This list will be different for everyone and requires you be realistic about what is a need. The financial fast also entails spending only in cash and recording every transaction as it’s made, justifying the need. You can use a checkbook or debit card register, a notebook, an excel sheet, or apps such as www.Mint.com to record your transactions. Recording your transactions helps keep you accountable to the fast as well as gets you to think about your needs and wants. A financial fast can be beneficial to do before beginning a financial diet because it immerses you more into learning what areas are and aren’t flexible.
Financial Diet
A financial diet, on the other hand, is more prolonged and allows you to be creative with your spending. First, know what is a need and what is a want. From there, brainstorm ways to reduce or eliminate your spending in certain categories. Don’t be afraid to get creative. Use what you already have and look for DIY projects. Similar to the financial fast, spending in cash and recording your transactions can provide you even more awareness and accountability of your spending. Below is a non-exhaustive list of examples in which you can cut spending sorted by category.
Food
- Limit the number of times you eat out (i.e. once a week)
- Prepare meals at home
- Bring your lunch (and any snacks you’ll need throughout the day)
- Split entrées when you go out to eat (make sure to know what extra charge may be assessed for doing so)
- Ask if the restaurant does half-orders
- Sign up for coupons at places you frequently eat
Entertainment
- Check out books or movies from the school or public library
- Drink with friends at home rather than spending money in Aggieville
- Utilize services such as RedBox or Netflix instead of going to the movies
- Invite friends to go to the park or have a game night at home
Transportation
- Walk or ride your bike
- Carpool
- Stay on campus between classes instead of driving back home and back to campus again
- Use the ATA Bus
If you don’t succeed at first, that’s okay. It’s not easy to change your lifestyle right away and like other diets, it takes time as well as requires you to tweak it until it fits for you. Consider finding a friend to participate with you and hold each other accountable. Once you find success, think about what to do with your extra money. You can use it to pay down debt, save up for emergencies or upcoming trips, or even think about investing it. The first step though is to be healthier and lose the excess spending. Check out our Twitter in the coming month to read more tips on saving money.
Sources:
- https://www.usaa.com/inet/ent_blogs/Blogs?action=blogpost&blogkey=financialadviceblog&postkey=budgeting_basics_needs_vs_wants
- http://www.goodhousekeeping.com/life/money/advice/g776/money-diet/
- http://usatoday30.usatoday.com/money/perfi/basics/2005-04-14-financial-diet-little-things_x.htm
- http://www.moneycrashers.com/financial-fast-improve-spending-habits/
Christyne Stephenson
Peer Counselor III
Powercat Financial Counseling
www.k-state.edu/pfc
