Another new year brings another set of resolutions — many of which involve saving more money and budgeting effectively. Whether you’re currently in school or have been in the workforce for a few years, it’s smart to make these changes now in order to set yourself up for future financial success.
But it’s one thing to make these changes, and another thing to stick with them. Here’s a few tips to set financial goals that count and keep yourself on track throughout the year.
Create A Budget. Then Write It Down.
This is important. Many of us budget in our heads, but don’t take the time to write it down. Dig out your notebook — or use our budgeting worksheet. Then, follow these steps to set up an effective budget that helps you make the most responsible decisions with your funds.
- Determine a timeline for your budget — will you track it by week, month, semester, or year?
- Separate your expenses into categories like housing, transportation, and entertainment
- Revisit the document on a regular basis to update and track payments
The way you set up your budget is up to you. The important thing is to get it written down.
Wants Versus Needs
Obviously, there are things you need to pay for such as tuition, fees, housing, and food. The line between “needs” and “wants” can be blurry, so it’s important to clearly define them in your budget.
For example, if you’re paying for a school meal plan, going out with friends is a “want,” even though you need to eat. That doesn’t mean you have to give up eating out or spending money on things you want — in fact, it’s often important to do so!
By determining which expenses are “wants” and which are “needs,” you’ll be able to spend your money responsibly without going overboard.
Financial Quick Tip: Consider giving yourself a set allowance to spend on your “wants.” If you’re saving up for something big, determine which “wants” you’re willing to spend less on each week.
Credit or Debit?
When it comes to the debate between credit cards and debit cards, there’s really no right or wrong answer. In many cases, it’s smart to use both. However, it’s especially important to use your credit card responsibly.
- Use your credit card for one small charge each month — otherwise, keep it for emergencies only
- If an emergency does happen, stop your monthly charges and instead use that money to pay off your credit card
- When using your debit card, keep an eye on your checking account to make sure you aren’t spending more than you have
By handling your spending this way, you can build your credit score without relying on credit card debt to fund all of your wants. Your debit card gives you the convenience and security of not having to carry cash everywhere.
Loans and Financial Aid
Chances are you’ve had to borrow some money to pay for at least a portion of your education. If you’ve taken out a variety of different loans, it can be difficult to keep track of what you really owe.
- Check out the National Student Loan Data System (NSLDS) to determine the debt that you’ve incurred from the government
- Visit AnnualCreditReport.com for a free, accurate credit report and a list of any private loans you’ve borrowed
When you’re considering taking out a loan, it’s helpful to research repayment options to find the loan that is right for you. If you find that your payments are too high, you may want to consider refinancing all of your loans into just one loan with a potentially lower interest rate. Refinancing means that you’ll pay less each month on your student loans – if this sounds like a fit for you, U-fi can help you start the refinancing process.
Setting yourself up for financial success doesn’t mean you need to sacrifice experiences like going to the movies or eating out with friends. By budgeting and defining your wants and needs, you make smart choices that count.
Want to make another smart financial decision? See how U-fi can help you refinance your loans.