You finally landed that first gig in school. You’re a college student and you found yourself a job that pays you a decent amount, allows you to get out, and helps you pay the bills. Now you just need to figure out what to do with this money. You need to make some smart moves so that you don’t waste our pay check at the bar as soon as you get it.
What should you do with your check in college?
Figure out your expenses.
The first thing you need to do is to figure out where you need to spend your money. Where does your money absolutely have to go? What are your financial obligations?
There are two types of expenses: fixed and variable. Fixed expenses are things like rent, insurance, and anything else that’s a steady number on a consistent basis. It’s easy to figure out these expenses because they never change. When figuring out your fixed costs you just need to add up rent and everything else that you absolutely have to pay each month.
Variable expenses are things like your food and entertainment for the month. This is variable because the money spent here all depends on how often you consume food or go out. This also depends on how much money you have left. For example, if you have $200 in your bank account after rent, you might have to watch what you eat or how often you go out.
Once you figure out your fixed and variable expenses, you’ll see how much money you have left over for other fun in life.
Consider your goals.
The next step is to decide what to do with your money. Do you have any goals? Do you want to save up for a trip in the future? The reality is that you won’t be making six figures as a student. While you shouldn’t stress too much about saving money, it helps to at least build the habit of having financial goals.
For example, if you want to get into the habit of saving money you can try to plan an annual trip. I did this in college. I haven’t missed a Spring Break since 2006 (this year included). How do I do it? I put aside $20 a week for the whole year. This is usually enough money for a week away.
Once you see results from saving money, you’ll be motivated to save more and for different goals. Do you want a new car? What about a new wardrobe? We all have different lives and different financial goals.
Create sub-accounts.
The fun part of saving money is creating many sub-accounts for your various goals. I used ING Direct to create a few different accounts for my goals. For example, I always have a “vacation” account that I put money into. When I make a little bit more money, I put it into this account. I want to travel as much as possible. This is why I create sub-accounts so that I have a visual reminder of where I want to be really spending my money.
Make more money now.
Now it’s time for you to make some money. This is a topic the deserves its own post. What are a few more ways you can make money in college?
- Start an online business.
- Sell your crap online.
- Ask for a raise.
There are many more ways to increase your income. The point is that you find ways to increase what you’re making.
That’s how you can spend your first pay check in college. These are just my humble suggestions. You can try them out to see if they work for you and your unique situation.
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