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  In my freshman year, I really
didn’t do much in the way of financial planning. I had a
very rough budget for each semester, mainly in my head,
and I got by each semester with varying degrees of
success. Once
I moved off campus after my freshman year, these varying
degrees of success were more like varying degrees of
struggle. That’s when my girlfriend, Jennifer, really
started to get on my case about doing some planning with
my finances.
.gif) Now Jennifer was, and still is, really into
planning. She just gets a kick from planning things,
tracking them and reviewing them. She is great at it and
she does it with everything. So when she started to get on
my case, I knew that in theory, she was right and I should
do more planning. I
saw how it benefited her, but I also felt that her level
of planning just wasn’t right for me. It didn’t suit
my personality. After a few discussions on the subject, we eventually came up with a couple of
simple tools that helped me plan my finances and then
track how much I spent. I have included a copy of the
first one below, filled in as it was for the fall semester
of my junior year.
|
Priority
|
Goals
(Wants & Needs)
|
Time
Frame
|
Amount
|
|
1
|
Pay rent
|
Monthly
|
$450
|
|
1
|
Buy groceries/food
|
Monthly
|
$200
|
|
1
|
Pay bills – heating,
electricity, telephone
|
Monthly
|
$120
|
|
1
|
Gas
|
Weekly
|
$30
|
|
5
|
Winter Clothes
|
November
|
$200
|
|
4
|
Holiday presents
|
December
|
$200
|
|
2
|
Entertainment
|
Weekly
|
$30
|
|
1
|
Books/school supplies
|
September
|
$200
|
|
3
|
Saving for a better car
|
Monthly
|
$100
|
|
3
|
Weekend away
|
November
|
$300
|
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Steve,
Here are a couple of hints on
completing the table:
- Be
clear in defining your wants and needs. You
will be more likely to achieve what you want
if you can put it down clearly.
- Set
as accurate a time frame as possible. That’s
really important as the amount doesn’t mean
much without and accurate time frame to go
with it.
- Be
specific and realistic with the dollar amount.
Hugs,
Jen
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.gif) As you can see from the table, I put
all of my needs as a first priority. I couldn’t really
say that any one of them was more important than the
others. After that I looked at my wants. General
entertainment came in pretty close behind my needs because
I figured between school and a part-time job I needed some
relaxation time. After that, I had my other wants for the
semester. The previous year Jen and I had a really great
weekend away in the fall. It really was a high point of
the year, so I wanted to do that again. I also wanted to
buy presents for the holiday season, but I knew that I
could adapt the amount I wanted to spend to match my
financial situation later in the semester. I also wanted
some new winter clothes, but while I knew I wanted them, I
knew that I still had clothes to wear from previous years.
Once I had completed this chart, with
Jennifer’s assistance, I had a pretty good financial
picture for the semester ahead. Taking into account what I
had in the bank and what I expected to earn, I knew that
some things had to be changed. So, I cut back the new
clothes to $100 and agreed with Jennifer that the weekend
away, which I had planned to largely pay for, would be
part of her holiday present. Then, I cut the amount I was
planning to spend on presents to $100.
I considered cutting the money I was saving for a
replacement car, but I had been driving a piece of trash
for the last two years and really needed a more reliable
car. With those adjustments, I felt a little bit better.
Then I decided to try and keep my average weekly
entertainment spending to $20, just so I would have some
unallocated cash in case something came up.
.gif) As the semester went by, I kept a
basic record of how I spent my money and, generally
speaking, I followed the plan. I admit over-spending on
the weekend away. At
least I knew that I had over-spent, so I managed to pick
up some extra hours at my part-time job to cover it. By
the end of the semester, I was in better financial shape
than I had been in previous semesters and, equally
important for me, I felt in control. The next semesters
were even better as I kept on planning and the records I
kept in the previous semesters helped me do a better job
each time.
I mentioned Jennifer’s planning
before, well she wanted me to pass on how she goes about
financial planning. Now, we don’t have the time to go
over her methods (she has a whole spending and savings
plan going) but if you would like to see how she does it
click here.
Click here
for an information sheet personal money management
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