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Living Within Your Means

By: Green Panda | Date posted: June 30, 2008 (5:30 am) | Write a Comment (1 Comment)

 

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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1 Comment
  1. [...] income and monthly expenses can be a reassuring guideline that lets you know that you’re are living within your means. On the other hand, some structured spending can help you be more aware of your fiscal habits and [...]

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