I just received my financial aid disbursement the other day. After having a mini-panic attack about how much debt I was already in, I realized the best way to combat future stress was to determine a solid budget plan. I feel that I've always been fair in my money-spending habits but I could not tell you exactly what I was spending every month. The uncertainty ultimately leads to a lot of wasteful spending and, knowing myself, my splurging tends to be sporadic and I'd like to reign that in. It's important to be aware that a budget is not limiting your spending but simply accounting for it. You should set aside a "fun" budget because you should be able to spend money on things that give you pleasure like a night out with friends or that dress you've been eyeing. In any case, being financially aware and literate will only help you in the future when having to manage more bills and repaying those loans back! 1. Make a budget The first step to making a budget is figuring out how much you're spending on what. It took me a couple months to figure this out. Since I mostly use a credit card for my expenses, it was easy to see the transactions list and use excel to categorize them. Another method is keeping every receipt for a month or two and doing the analysis that way. However, the easiest way to do this is use a money management app that tracks everything for you. Some banking institutions even have these apps built-in to your online account. If yours has this feature, take advantage of it! Identify constant expenditures like rent and identify which expenditures can be variable like food, clothes, and utility bills. 2. Use money management app Mint is probably the money management app that has gained the most popularity. It is developed by Intuit, the same company that coined TurboTax. It's a free app that pools all your financial information from your bank accounts, IRAs, and mutual funds. It'll also keep track of your expenses, deposits, and budgets as you spend. If you're using a credit or debit card for most or all of your purchases, this may be a good option to keep track of your accounts in an easy-to-use format. Mvelopes is another free app available for iOS and Android that allows you to set budgets called "envelopes" for each expense. It syncs up with your financial institution to see how much money is coming in and going out. Before you're allowed to spend your envelopes, you must first define your income and your spending budget for each category. The big plus for this app is that you're seeing how much of your predefined budget that you're spending, not how much of your net worth is being spent. 3. Credit card points If you're already using a credit card for most of your purchasing, it may be beneficial to get a rewards card that offers something that you'll actually use. For example, I travel across the country numerous times a year to see my family and significant other, so I opted for an airlines-branded credit card. By using this credit card, I'm able to rack up points that I can put towards an airplane ticket that I'm going to purchase anyways. Other cards can offer you discounts to stores that you already go to. If you already shop at Amazon or Target, each store has their own respective credit cards that offer 5% back on all purchases made there. 4. Re-evaluate where you're storing your money First, if you are paying a fee to store your money in a checking or savings account, you'd be better off looking for better options. You should be able to keep your money in an account without getting a monthly deduction from your bank. Look for non-fee accounts that will potentially save you hundreds of dollars per year. If you're storing your money in a savings account, you should check the interest rate on it. For money that you're not intending to spend within the next year or two, it would be better to invest that money in a higher interest-accruing account. The reason for doing this is if the rate of inflation is higher than the interest accrued on your savings account, then you're losing money! It's easy to fall in the pitfall of thinking $50 yesterday is the same as $50 several months from now, but that is not the case. Although the trend for inflation in the United States has been trending down for the past couple months, I can assume that most of your savings accounts are paying out much less than 1%, so your buying power is being diminished in this type of money account. I recommend investing that money into an IRA or mutual fund where your gains are projected to be significantly higher. Read Also: For Doctors: How to make money online 5. Plan out your weekly meals I've noticed that a lot of my monthly expenses come from eating out. A single meal can easily reach about $10, especially if you're living in the city. Planning out and meal prepping on a weekly basis not only will save your wallet but will also save your waistline. Take-out food tends to be high in sodium and oil content. As doctors-in-training, we know this can lead to obesity and hypertension. By controlling everything that goes into your food, you can customize the taste to exactly your liking and maintain healthy eating habits. I know we med students don't have a lot of time to spare, but there are tons of super simple and quick meals out there. I use the crock pot because it's a breeze to dump in all your ingredients and come home to a fragrant aroma signaling that dinner is ready! These are just a few easy tips to keep your wallet as full as possible. I hope these have been helpful and if you have any additional suggestions, please let me know in the comments below! Happy saving! Source
