Money Management

This is an important step on your way to financial independence. The stereotype is “broke college student,” but learn how to break that stereotype and save up for your future, or even the right now expenses. Learn how to have fun now while making sure you can have fun in the future.

Needs vs Wants

Needs: Required purchase you “must have,” i.e. rent, utilities, car note, groceries

Wants: Something you would like to purchase, but isn’t necessary, i.e. entertainment, clothes, going out to eat

You should always pay off your needs before purchasing wants
When planning for "wants" spending money, subtract both your variable and fixed expenses.
- Fixed expenses are recurring bills that don’t fluctuate and are constant each month, i.e. rent, car payments, cable, internet bills
- Variable expenses are charges that function based on usage an the monthly rate varies,i.e. cell phone bills, utilities

Spending Plan

This includes calculating your income vs expenses for the month. Using actual figures from your needs expenses, you would calculate how much money you have left to place in savings and how much can be placed towards wants for the month. A spreadsheet can be a great tool to track the spending plan. Excel has a good budget sheet.

Cutting Down on Expenses

Housing
- Apartment vs Dorm
- How many roommates? More roommates means lower cost
Food
- Meal plan vs Cooking
  - This goes beyond money costs, there is an opportunity cost here. What are you giving up for the other?
    - Meal plan: likely costs more but less time spent on cooking. Convenience vs Money
    - Cooking: you can find cheaper places and create meals in bulk, but you have to set aside time to cook for yourself.
  - Shopping at cheaper places does not have to mean lower quality. Trader Joe’s, Aldi, Safeway, Harris Teeter, local butchers, and farmer’s markets are all good alternatives to Giant and other basic grocery stores.
- Split meals with friends. This splits responsibility, cost, and time while making it more enjoyable.
- Eat out less