Living Within Your Means

A full-time college student that I know  was evaluating their budget. They called me to see how the should allocate. I gave them the basic run down:

• Pay yourself first for an emergency fund.
• Pay down debt aggressively.
• Do not spend more than what is budgeted.
• Try to live within your means.

This is what we came up with after discussing it back and forth. These are approximations:

Income
Job                         $1,100.00

Expenses
Rent  Share            $225
Food                      $100
Car Insurance         $69
Gasoline                 $160
Savings                   $100
Cat Expenses          $25
Debt                        $100
Recreation               $30
Car Payments          $205

There was a big tug of war on the issue of recreation and debt. I pointed out once they knock down the debt then they will have more cash to use for spending (just not all of the $100).

I admit it’s weird having a friend/relative call you to ask about budgeting information. I was cut off guard, but I really got interested. I was explaining how money can be used as a tool and if you can delay some expenses when you’re in school (like some road trips, but not all), you can have more choices when you graduate. I gave the “don’t be like me with debt and student loans!” speech which either hits a nerve or scares people.

Have you had friends/relatives talk to you about finances? What piece of advice did or would you offer?

Photo Credit:  Joshua Rappeneker

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