Tuesday, 7 May 2013
Towards the end of every quarter, I get a reminder to register for my classes for the next quarter. And you know what that means…another quarter’s tuition is due. Yikes.
Thankfully, my husband is an accountant and is very mindful of finances. Through his encouragement, I have learned the importance of budgeting, saving, and taking out as little student loans as possible. Together, we developed a budgeting system that allows us to minimize our debt and maximize our savings.
So I present to you…
Graduate students are eligible to receive 100% funding through student loans. That means that no matter your financial situation, you have borrowing power for the full cost of tuition and cost of living. This is different than undergraduate financial aid, because students are expected to have financial help from their parents at that education level.
However, just because we can potentially borrow hundreds of thousands of dollars, doesn’t mean that we should. Our goal should be to minimize our debt and take out the smartest types of loans.
Thankfully, Paul has a steady income which allows us to minimize my student debt as I go through my education. But I would like to share our budgeting techniques and encourage you all to be mindful of your personal finances.
1 // Determine what your fixed bills are. These are expenses such as rent, car insurance, tuition, etc. Every month, immediately put aside your funds to cover each of these bills. Try to set up online bill pay so you can seamlessly pay your bills each month, preferably during the first week of the month.
2 // Determine your variably fixed expenses. We call them this because although the exact amount varies each month, these bills are always present. For us, these are things like electricity and prescriptions. You should observe these types of bills over several months so you can determine an average amount that you should expect each month.
3 // Figure out how much you want to be saving each month. If you are extremely tight, savings may not be your focus but it is important to think about setting aside a chunk of money every month. It can be from $10 to $1000, but get in the habit of making savings a priority.
4 // Calculate how much money you will have left over each month after your fixed bills, your variable bills, and savings. This is the amount you really need to keep aware of! Paul and I think of this amount as our monthly spending allowance. We then further split this money up per week of the month. We each have an amount of money that we can spend per week and when it’s gone, it’s gone. The goal is to be at or under our monthly spending allowance. We use this money on groceries, eating out, entertainment, gifts, etc. It works out in a way that if we spend a lot on groceries one week we may use up our allowance, but we should be eating those groceries at home and wouldn’t need to spend money on eating out.
These are just a few things that work for us. We are trying to minimize my student debt and save for our future {maybe a baby in the near future hehe}.
Happy budgeting!