As an editorial intern here at The Penny Hoarder and a full-time student, I’m still trying to figure out this whole #adulting thing. So far, I think I’m doing OK — my fridge is never empty, so that’s a win, right?
That being said, like many college students, I’ve never made a budget, and it’s not going as well as I’d hoped.
Since I graduate in May, I think it’s finally time to “work smarter, not harder” with my finances — before it’s too late.
So I’m finally sitting down to see how my income matches up with my expenses, and figuring out how to make a budget that will work for my life. (Next up: learning how to stick to it.)
What’s Obvious, Even Without a Budget
I don’t need a fancy budget to tell me a few things about my financial situation.
I don’t have the money (or time) to go out with friends, buy new clothes or make “just because” purchases.
Want to know why? Well, first of all, my rent makes up 68% of my expenses, which is ridiculous.
Last semester, I had 48 hours to find a place to live that was still a reasonable distance from campus — and in the middle of the spring semester, my options were limited, and this place was the cheapest I could find. But it’s time to look at other options, and I’ll never again rent an apartment outside my budget, no matter how much of a bind I’m in.
Aside from that, I don’t really track my spending. I buy what I need, when I need it; this is probably the stupidest way to handle my money. Sometimes, I end up with $10 in my bank account, especially after rent is due.
One thing, though: I am extremely lucky and grateful my parents set up a college account way back when to help me with rent while I’m in school. I’m also thankful my mom lets me drive her car to work, which means I don’t have to worry about a car payment or insurance.
But once I graduate, that gravy train will end, so I need to figure out a way to live without those supports.
Maybe if I figure out how to actually manage my money by making a college budget, I won’t feel that panic rush over me when I realize that I don’t have enough cash to buy groceries — and won’t have to reach for my credit card to cover them.
Here’s How Much I Made in September
As an intern, I make $12 an hour, which is actually pretty generous for an internship (thanks, TPH!).
In addition, I’m the opinion editor at my university’s newspaper and a freelance copy editor for a U.K.-based blog.
And I’m lucky enough to get an extra boost each month, when my dad sends me $800 to put toward my rent.
Here’s a breakdown of my income in September:
- The Penny Hoarder: $12 an hour before taxes, 40 hours/week, off two Fridays a month to go to class
- Total earnings: $1,440
- Freelance copy editing: £6.25 per article, minimum of 80 articles per month
- Total earnings: US$670
- Additional income for rent: $800
Total income: $2,910
Unfortunately, I missed out on an extra $100 or so because I didn’t turn in my newspaper paperwork on time. ¯\_(ツ)_/¯
This month, I made about $727.50 each week.
Interestingly, full-time female workers between the ages of 16 and 24 earned median weekly income of $470 for the second quarter of 2016, according to the Bureau of Labor Statistics. So, it’s safe to say I make more than most women my age, so I really should start getting it together with my spending.
Where My Money Went in September
In all honesty, looking at my spending for the first time was pretty scary. It’s so easy to just swipe your card without knowing how it all adds up.
Here’s the breakdown of what I spent in September, before I started budgeting:
Home: $1,553. FML. I can’t wait to move.
Other: $70. I got knocked with a $20 interest charge on my credit card. Ouch. The other $50 bought me some stationary, a new picture for my wall, some parking and Beyonce’s “Lemonade” album because, duh.
Bills and Utilities: $403. More than half of this was for a credit card payment. My goal is to pay off my balance by the time I graduate in May. The rest was for my internet, electricity, Hulu, Spotify and renter’s insurance.
Auto and Transport: $114. I splurged this month and got a $25 car wash. The rest is for gas, which mostly goes toward the commute to my internship. Toward the end of the month, I saved 20 cents per gallon thanks to my Winn-Dixie fuelperks!
Food and Dining: $508. My dog ran out of food, so I spent $50 on a 36-pound bag. I also went overboard with coffee: Seven of my 14 transactions in this category were at coffee shops. *facepalm* 20% of my spending was on food and dining — I think that’s way too much!
My boyfriend and I enjoyed one date night this month and I bought the first round of drinks. The rest of the money went toward groceries for the two of us (we eat clean, meaning fresh everything), plus I made my mom dinner one night.
In total, I spent $2,648 in September, which means I had $262 left after these expenses. Yikes.
My birthday was in September, so I had a bit of extra help — my boyfriend paid for my personal training sessions, so I kept $280 in my pocket. Without that gift, I would have ended up with a negative balance!
As you can see, I don’t include school expenses; this is because I have multiple grants, scholarships and a 529 plan that cover those costs. I also have one small loan that I will begin paying back when I graduate.
I’m also extremely thankful that my internship provides me with full-coverage health insurance — not a single dime comes out of my paycheck for it.
How I Made a Budget That Works for Me
After blankly staring at my computer screen for an hour trying to figure out exactly how I was supposed to create a budget, I decided to look for budget templates.
Making a budget may seem a little intimidating at first, but once you get into it, it’s surprisingly simple.
First, I calculated what I’d earned in September, which was easy. I used it as the basis of my budget, since it won’t fluctuate much month to month. As detailed above, I earned $2,910.
Then, I wrote out all my set, necessary expenses, including rent, bills, gas and my savings goal of $80 a month. Saving is extremely important to me, so I made it a priority and worked the rest of my budget around it. To make it as painless as possible, I set up an automatic transfer of $20 into my savings every Friday.
I thought about what I wanted to do with the money left over after my necessary expenses. Did I want to buy clothes? Go out to eat? Save it to travel? Maybe go to a bar every now and then with some friends?
Since I’m trying to lead a healthier lifestyle, I decided to make groceries my priority. I did, however, leave aside a few extra bucks to buy my dog some toys because he’s destroyed nearly all of his old ones. I chose to forgo my dream of buying new clothes, at least for this month.
Everything adds up quickly, so I’ve decided to put off starting a travel fund until I see how this budget works. I don’t want to overwhelm myself with too many goals at once and wind up ditching the budget entirely!
Here’s a breakdown of my budget:
Every time I spend money, Mint automatically subtracts the amount from the appropriate category. That way, I can see exactly how much I have left to spend on, say, coffee.
I’ll be back after the end of the month with an update. I’m going to try to stick with this budget — let’s see how I do!
Your Turn: Have you ever made a budget? What was your biggest challenge?
Kelly Smith is an editorial intern at The Penny Hoarder and a senior at The University of Tampa. She has really great parents.