Learn how to budget and save for future goals

Learn how to budget and save for future goals

By Mike Lauerhaas, UWL senior majoring in accountancy and finance

Are you wondering how to save money in college? Budgeting is a great tool for saving money for daily college expenses and planning for future experiences - whether that is traveling abroad, attending major sporting events or taking a summer adventure.

If you have accepted a job offer, creating a sample budget based on your future salary can help you understand what you will realistically be able to afford. When doing this, it is important to remember that the salary on your offer letter is not actually what you take home. Taxes and other deductions mean your "net pay" will be lower than your "gross pay," so make sure you budget based on the money that actually hits your bank account - your net income - to get an accurate picture of your finances. This can remove a large amount of stress and lead to great adventures.

Budgeting basics

There are two main things that go into a budget:

A common rule that financial planners often suggest for those starting out is the 70/20/10 rule. This is a realistic alternative to the classic 50/30/20 rule that works better when your income is still growing.

• 70% of your income goes toward "living" (rent, groceries, utilities)
• 20% goes toward "wants" (hobbies, entertainment, travel)
• 10% goes toward savings or paying off debt.
  

These categories help you realize how much you are spending on various things and make it easier to manage your money responsibly.

Review expenses carefully

Once you create a budget, take time to review each expense category. This can help you identify areas where you might be able to spend less.

Be sure to look for "hidden" costs, such as monthly subscriptions, textbooks or club dues that can be easy to forget. Groceries are another major expense for many students. Food pantries such as the UW-La Crosse Food Pantry are a free resource available to students and can help reduce grocery costs.

Transportation can also add up. Students can save money by taking advantage of public transportation. In La Crosse, students have access to the free MTU bus system rather than paying for gas and parking.

Plan conservatively

When building your budget, it's smart to overestimate your expenses and underestimate your income. This approach will help you stay out of debt and leave more money in your pocket for emergencies

At UWL, the It Make$ Cents! Money Management Center offers tools that make budgeting easier, including templates and expense-tracking worksheets. Writing down purchases as you make them can help you understand exactly where your money is going.

Use credit wisely

While paying with cash gives you that physical "hurt" that keeps you from overspending, using a credit card responsibly is a huge help for your future. Paying with a card and then paying it off in full every month helps you build a strong credit history. This is vital for when you eventually want to rent an apartment, buy a car or even get a house.

Get support

Understanding your finances can feel like a huge weight lifted off your shoulders. Creating a budget is key to reducing that financial stress.

But don't feel that you need to do this alone! At UWL, this is where the IMC Money Management Center can step in and assist UWL students for free! Set up an appointment anytime on our website's booking page and meet with a financial peer mentor (a student like yourself) to develop a personalized budget and spending/saving plan goals.

In addition to budgeting, mentors can also help with topics such as:

• Building credit
• Paying off debt
• Understanding student loans
• Searching and applying for scholarships
• Learning the basics of investing