Back 2 school – budgeting masterclass!
Are you a student or recent graduate eager to budget while also taking control of your financial future?
Being a student or a recent grad is an exciting phase of life filled with learning, new experiences, and perhaps a few late-night cram sessions. 📖 But it's also a time when managing your finances becomes a crucial part of your journey.
Where to begin?
A good place to start is to have a think about what you want to achieve with your wonga. Whether it's buying your first home, preparing for retirement, or simply growing your wealth, having some clear financial goals is essential. 🎯
For more info, check out this awesome blog on financial goals.
Ready, set, budget! 💼
Next, it’s budgeting time. While that word might sound about as exciting as watching paint dry, it’s key to organising your finances. Create a detailed budget by firstly listing your monthly income to understand how much you can set aside for saving each month. As a student, this could be your student loan, money you’re getting from a part-time job or pocket money from a generous family member. 💰
The next step is to take off your monthly expenses from your income (rent and bills, food, fun outings, and that gym membership you sometimes use 😅). Make sure to be very thorough when you’re recording your expenses and what remains can be allocated to savings and investments.
How to budget – the nitty gritty 🤔
Sticking to your budget takes a little practice, so record your expenses for a good period of time to really see where your money goes. There are some neat budgeting apps out there that make it a breeze, or you can go old-school with an Excel or Google sheet. There are some nifty templates for those online to make the process nice and simple.
Taking the vintage route with a spreadsheet can be beneficial because you can fully tailor it to your needs. Here are some handy spreadsheet tips to get you started.
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Create monthly income and expenses columns – start by listing all your sources of income in one column and in another, your monthly expenses
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Use formulas – Excel has some super sweet built-in functions. For example, to calculate totals, use the SUM for your income and expenses. For budget tracking, you can subtract your expenses from your income.
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Categorise your expenses – group similar expenses into categories (e.g., ‘food’, ‘transport’, ‘leisure’). This makes it easier to see where your money is going.
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Set a budget limit – in a cell, set a monthly budget limit for each category and Excel can help you compare actual spending to your budget.
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Track your spending – regularly update your Excel sheet with your actual expenses. You can add a bit of life to it by using cell borders or colours to highlight important parts, like expenses that exceed your budget. 🎨
That way you can plan for future months, and when you’ve got it locked down you can even set up a direct debit to your savings or investment account. Dodl allows you to do this from just £25 a month, and you can set up your investments to be automatically allocated each month. Just remember that the value of your investments could go down as well as up.
The importance of holding cash 💵
As well as putting aside for investing, it’s important to have some cold, hard cash on hand, like a little financial safety net. Emergencies, unexpected costs, or maybe a spontaneous night out – holding some easily accessible cash has your back when life throws you curveballs. ⚾
They say that having an emergency fund that can cover at least three to six months' worth of living expenses is ideal. While this financial cushion provides peace of mind and security during challenging times, as a student or graduate it might be a little tricky to muster up this much cash. Building up your emergency fund takes time, so start small – even accumulating a hundred pounds or so over a few months will make a difference! 🌱
What’s next?
We have more budgeting tips on their way on our socials and blog pages, so stay tuned!
If you feel ready to begin your investment journey, simply open your account, and take the first step towards securing your financial future. Remember, it's not about how much you start with, it's about the commitment to save and invest for your future.
🔔 Investing carries risk and nothing in this article should be taken as advice - Dodl doesn't give advice, but we do hope the info is helpful!