RISE Blog | Budget Like a Boss

Written By: Silas James, Peer Educator
Edited By: Catherine Cespedes & Elizabeth Perry
March 15th, 2024

Ever go into the grocery store for one item and come out with ten? We've all been there. You don't have to feel guilty about overspending when it happens. Instead, learn how to create a budget plan! Budgeting, the practice of deciding how much money you intend to spend and where within a specified time frame, is an important life skill that every adult should learn and implement in their life. By creating these useful financial wellness habits in college, you will be set up for success during school and beyond.

Thriving, not just Surviving

Budgets can be strict or loose, but most importantly, they need to be personalized to fit your own needs. For example, I only use the free bus system for students, so the money I budget for transportation is much smaller than what a student who commutes regularly with their own vehicle would allocate. So, it's important to work around what you prioritize your spending on. Your spending may include things like housing, utilities, transportation costs, food, healthcare, subscriptions, and entertainment.

Experts recommend using the 50/30/20 rule, allocating 50% to needs, 30% to wants, and 20% to savings or debt repayment whenever possible (O'Shea et al., 2024). Of course, this isn't always realistic based on your income (especially in college), and you can adjust as needed. Even if you can't allot a full 30% of your budget to what you want, it's important to distribute some portion of your budget to entertainment. This means having a reward system. Set a goal of how much you want to save so that you can reward yourself once you've spent that 50% on needs. Treat yourself to buying new clothes, games, going out or anything you desire. This doesn't mean it should become a massive priority in your budget – but your budget should have space to satisfy your needs, otherwise it will be much trickier to stick to.

Of course, a highly personalized budget doesn't just appear, and creating a budget can be difficult. It's hard to know where to start, but it never hurts to try! You can begin by reviewing your expenses in a month and recording each one in its appropriate category. Determine your income, compare your expenses, and then identify where adjustments need to be made (Consumer 2022). If you are unsure about whether you're spending too much or too little on something, there are various resources on and off campus to help. Red to Black Financial Coaching, under Raider Relief Advocacy and Resource Center, is a great place to start, and there's also this free budget planner worksheet (Schwahn 2023).

Thrifty Tips and Money-Making Tricks

It turns out money doesn't grow on trees after all! A budget is best made when you know how much money you have each month to spend. Many students enter college either trying to understand their income or becoming financially independent for the first time. Because of this, for many students it is important to establish a source of income, whether it be an allowance, scholarship money, or a job, relieving financial burden throughout college.

Applying for scholarships might seem like scaling a mountain, but the payoff can be truly rewarding. Don't sweat it, kickstart your scholarship journey by nabbing the yearly scholarship up for grabs at Texas Tech University. This mass application allows you to apply for TTU specific scholarships easily. But hey, why stop there? Dive into the endless sea of scholarships waiting for you online or with a quick chat with your academic advisor. Whether you're into art, sports, gaming, or anything you are passionate about, there's a scholarship out there with your name on it. Need proof? My buddy scored some sweet cash just for being a Super Smash Bros champ. There are scholarships for everything.

Did you know your workplace might offer some sneaky scholarship opportunities? And if you're job-hunting, landing one could be your golden ticket to a steady cash flow. Whether it's on or off-campus jobs you're after, cast a wide net and reel in those applications! Don't forget to work your charm with follow-ups too. Word of mouth works wonders, where it is a good strategy to ask your friends and peers if they know any good recommendations out there. Plus, TTU's Student Employment Services is like a treasure trove of job opportunities.

Now, let's talk about food and finances. There's no shame in asking for a helping hand if times are tough. The Raider Relief Advocacy and Resource Center has your back with Raider Red's Food Pantry, perfect for students in a pinch. Don't second-guess it; reaching out is free, and the rewards could be huge! Regarding groceries, try buying in bulk instead of single items. I love going to Costco because I get a large quantity of food for a lower amount of cost. To push it even further, consider buying dry foods in bulk. Items like rice, pasta, canned foods, or even frozen foods have longer expiration dates and are easier to spread across several meals.

Here is a list of other small tips college students should consider when trying to make budget friendly decisions:

Rent textbooks or buy e-books rather than buying a hardcopy for classes.
Take advantage of student discounts.
- There is this app called “Campus Cash”, which has amazing coupons for food places around Lubbock. Want a hard copy? Stop by the Student Union Building in the beginning of each semester to obtain a cashbook for free in front of the campus store.
- Popular services such as Amazon, Spotify, Hulu, etc. offer discounts to students.
Try using the free bus systems or walking to classes rather than paying to use Lime scooters daily.
Avoid impulsive buying but instead create a reward system. For example, instead of eating out every day, I like to eat at a good restaurant every Friday. This prevents me from wanting to spend on fast food, so I cook at home instead. That way, after a hard week of classes, I can reward myself by going to a nice restaurant with some friends on the weekend.

Good Credit, Good Karma

Budgeting and securing a job are important parts of financial wellness, but there's more to this money game than students may think. Ever thought about building your credit score? It might sound like a big adult thing to deal with, but it is like planting seeds now for a bountiful harvest later. A good, stable credit score can be used later in life to ensure good loans and apply to purchases for things like cars and mortgages.

So, what's the deal with credit scores? Well, think of them as your financial report card, telling banks and companies how reliable you are with borrowed cash. They should all be within similar ranges, but it will still be slightly different based on the equation being used to calculate it (Consumer Financial Protection Bureau, 2023). The higher the number (maxing at 850 on the FICO scale), the better your credit. Over time, a good credit score will save you lots of money. It opens doors to easier rent deals, creates better rates on insurance, can result in lower interest rates, and you can even get good rewards through the bank (DeMatteo, 2023).

Building credit may seem like a monumental task, but it's easier than you think. Regularly use credit cards (but keep it under 30% of your card!), pay in full whenever possible, and refrain from closing high limit credit cards (Weston, 2023). For example, I like to use my credit card only on groceries and emergencies and pay it off in full immediately when possible. This allows me to use my credit card every two weeks or so and it helps create a routine where I use my credit card frequently enough for my bank to see I am responsible enough to keep up with payments, hence building my credit score. If you haven't started building credit, now's the time! Establish a low limit credit card and use it when necessary. Trust me, a solid credit score is like the cherry on top of your financial sundae.

Financial Freedom

Good financial wellness habits are one of the more difficult things to learn as a young adult, and that's okay. But you can make your own life a little easier by setting up a budget and sticking to it. Taking the time now to create a good, flexible budget and develop a good credit score will only benefit you in the future. Oh, and don't forget to give yourself a gentle nudge when those splurges start calling your name. Seek out cheaper alternatives to keep your spending in check and live your best life within your means. Establish habits to build a good credit score now and reap the rewards later.

And hey, you're not alone in this money marathon! Texas Tech University is full of resources just waiting to be explored, all free for us students. So, dive in, arm yourself with knowledge, and let's conquer this financial journey together. Sure, it might feel like hard work at times, but remember: every dollar saved is a step closer to financial freedom, and that's something to look forward to.