Every morning you wake up and think “I need my coffee now!” You go to Starbucks before class and get your favorite Double Shot Venti Americano with extra whipped cream. But have you ever thought how it all adds up by the end of the week? Month? Year? Well if you order one per day every day at about $5.00 per cup that’s $35.00 a week! $150 a month and $1825 a year! You end up spending almost $2000 on coffee in one year! Imagine what else you could have bought with that money, like iPhone version 4.0, a new iPad, or even a used car. Hopefully you can see how even the littlest things add up to big amounts. Looking back, I really regret going to McDonald’s and ordering a Double Cheeseburger every day after basketball practice in high school. But now, in college, I know how to manage my money a lot better, so I’d thought I’d share some tips with you!
The first step to creating a budget is to figure out where all your money goes. You can do this by tracking all of your expenses for a set amount of time, like a month. If you’re a forgetful person, here is a tip for you: keep a small notebook or sticky notes handy all the time to remind you to write how much you spent before you forget. Include even the smallest expenses like gum or soda. When the end of the month rolls around, add it all up. You will see that amount you spent is a lot bigger than you thought. Even if you’re still in high school, it is a good idea to know what you spend your money on even though you don’t have to worry about big things like rent or electricity. You know what they say, “Practice makes perfect!” Once you realize your different expenses, now it’ll be easier to organize them when you have more things to pay for, like taxes, insurance, or cable. So if you start early, you won’t be buried under a mountain of expenses later on.
Brainstorm a little bit; what are your expense categories?