Thursday, September 6, 2012

Back to basics

Having taken out student loans for the first time in my life this year, I'm finding myself watching my savings a bit more closely than usual. Even during undergrad when a good portion of my paycheck went to my bills,  I was always able to put a little away in preparation for these two years in my master's program.

 I've already had to quit my job at the restaurant due to poor management and an environment that was more stressful than the money was worth. I'm still tutoring for now and I hope to pick up paid hours assisting at a local clinic; but I'm adjusting to the fact that, for the first time in my life, money is slowly coming out of my accounts faster than I can put it in.

Which leads me to the topic of tonight's post, budgeting 101.

A boring skill, I know, but an essential one that so many of my generation are quick to overlook. When I had cash coming in (from my job at the aforementioned restaurant) I was big on the envelope system.  A simple standard letter envelope, labeled with the amount of my fixed bills each month, where I could portion out my income before ultimately taking it to the bank. It's a system that is beautiful in its simplicity; sorting the money at the end of the night took minimal effort and the end result was that (fortunately!) I was able to manage my money well enough to pay my bills up through the month of October with a little saved up for the Holidays :)

The problem is that without cash money coming in I would have to be taking money out of my bank, just to be able to sort it out and deposit it back... not the most efficient use of my (quickly dwindling) free time.

 Enter one of the most popular, DIY budget websites/apps on the market. It was easy enough to get myself set up, budget out my expenses for each month (hang my head in despair over how quickly the additional expenses school keeps adding are ruining my plans) and enjoy the nifty little pie charts that show me just how much of my money each month is going into my car and my degree (as if I had forgotten!).

I haven't taken much time to play around with the additional features such as future goal setting or emergency funds just yet, mostly because for the next two years I literally have no money to spare (I know, I know Suze Orman would be shaking her head at my lack of advanced planning). But if they are as easy to use as the rest of the site I'll be happy to work with them sometime in the future.

Graduate school can be stressful enough without trying to think about how you're going to pay for it, but if the current state of our society is any indication we NEED to be thinking that far into the future (as scary as it is). Taking on student loans doesn't have to be a scary process and you don't need to plan on paying them off for the rest of your life! All it takes is paying attention to the gravity of the amount you are borrowing from the start, and use that to keep your spending in perspective.

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