Ask Elliot: Sporadic Spender
Elliot Hilden, contributor
I’ve been struggling with my spending and have been broke since the semester started. Any advice for making a budget and saving money?
Sincerely, Sporadic Spender
Dear Sporadic Spender,
Saving money is hard! I know I’ve struggled with budgeting many times before. Thankfully, there are some strategies out there that can help make saving easy!
Start a savings account. It may seem obvious, but the first step to having savings is having somewhere to store those savings. A savings account is generally a secondary account that you can transfer money in and out of that you can’t spend from directly. Adding the extra step of having to move money out of a savings account when you intend to spend it can make you consider the purchase more and help you cut back on impulse spending.
Every dollar spent, a dollar saved. This strategy, while relatively simple, is a quick way to work on your spending habits. Every time you make a purchase, double the amount and add that to savings. If you don’t have enough money to buy that item twice, then don’t buy it. If this doesn’t work for you, there’s also the option of rounding up your purchases. If you’re spending $6.49 every day on coffee, then save $0.51. You may not even notice how quickly it adds up, especially since some banks have settings to do it automatically.
The 50-30-20 rule. This rule is a way to work towards having savings while still getting to buy the things you want. In this strategy, every time you receive money, you put 50% towards needs, which would be things like rent, food, tuition and other necessities. You put 30% towards wants, such as a new game, DoorDash and other things that aren’t necessary to own. The last 20% then goes to savings, or your “rainy day” fund. Of course, it’s important to look at your finances as a whole and make sure that these percentages would work for you. If your needs would take up 60% of all money you receive, it is always an option to adjust the percentages to a system that works for your budget.
Stick to it. Of course, none of these strategies work if you don’t do them. It can be tough, but work hard to make it a habit, because in the end it will be worth it.
There are plenty of other strategies not mentioned here, so it could also be helpful to do some research and find what other options are out there. After all, everyone is different and the concepts above won’t work for everybody, so it is important to find what strategy works best for you.
Working towards a finance-focused future,