Learning how to deal with finances on a student budget is a never ending battle. However, there are ways to lighten the stress load if students are willing to make the effort to tweak things in their lifestyle that will help their bank accounts in the long run. Of course there are the tried and true methods such as cutting back on dining out at restaurants, benefiting from student discounts and renting textbooks instead of purchasing them at the bookstore.
But sometimes the solutions to helping students save money is as simple as knowing the difference between what one “needs” and what one “wants.”
It is a good idea for students to learn know how to create a needs versus wants checklist that they can apply to their own lifestyle, which is ideal for use on a regular basis. One way to begin this type of project is to break up the needs versus wants checklist into categories. Students should look at their expenses on a monthly basis and arrange them into easy to identify categories such as:
- Electronic Devices
- Food (Dining Out)
- School Supplies
These categories can be modified as needed. Next is to figure out how much money is being devoted to these areas. Once the costs have been assigned to each category and written down, it’s time to look at the results. At this point it should be easy to see where a majority of a student’s budget is being put towards.
When students have figured out where they need to start cutting back, the needs versus wants checklist really comes into play. This is the part of the process where students must be honest when evaluating where their dollars are being spent and how to fix it.
The easiest way for students to break down which spending habits need to be broken is to go through each listed expense and ask the following question every time: “Do I need this or do I want this?” Each answer will require another form of categorizing, but this time it will involve classifying which items/expenses fall under the “Needs” category and which belong under the “Wants” category.
Now that these two new lists have been created, it makes it much clearer which ones can be eliminated or cut back drastically from a student’s life. For example, let’s say a student has come to the realization that too much money is going towards fancy gourmet coffee at the local cafe. If a student is spending even a few dollars on this beverage, when done on a daily basis, it adds up to a lot over time. This is a “want” and not a “need” because it isn’t contributing anything significant to a person’s lifestyle or academic career.
To drive the point home, after identifying the “wants” list, students can take it a step further by adding up how much money they’ll save by taking those items off the list. Those figures alone is usually enough to motivate students to address their needs, instead of indulging in their wants.