What’s up next for you? A big move? An internship? Graduation? Marriage?
Unexpected costs can often be overwhelming and sometimes difficult to manage. The busier we get, the easier it is to miss something or develop a bad habit. It could be a bad eating habit or it could be a bad spending habit. Both increase stress, which is the last thing you’ll want during that time. So, take some time now to prepare so you don’t experience even more stress during what should be an exciting time!
Create or maintain savings. Savings is often that last thing we add to our budget, if at all, but even setting aside $5 a week yields $260 after 1 year! It can be hard to predict how much money we need during times of transition, which is why creating a habit of saving can reduce the burden if not eliminate it. However, to prepare for a transition you can consider all the costs you know you’ll experience and use that amount, or a little more, to help set a goal. Divide your total goal by the amount of time you have until your transition. For example, if you need $1,000 by September 2017 you’ll need to save $91 a month, or $3 a day.
You can use a savings account to separate that money and you’ll earn some interest! Take a look at our blog post Why get a savings account? for more information about why savings accounts can be beneficial for you.
It’s easy to make split second decisions that can derail your savings goals. If you don’t have a budget, this is a great time to make one. If you feel comfortable and confident to make it on your own—great! Stop by the Student Money Management Center’s website for tips and tricks to create a solid budget.
Written by Carol Brobeck, University of Illinois USFSCO Student Money Management Center.