Why Should I Budget?

There are various resources on campus that may have inspired you to budget: Scholarships & Student Aid Office, Frugal Scholars, and Rez Life amongst others. However, many McGill students do not budget vigorously (and some don’t budget at all).

I am guilty of not budgeting any of my expenses incurred during my time at McGill. One of my resolutions for the new year was to start budgeting so that I could control my cash flow and stop depleting my savings account. Initially, I did not see the point in budgeting because I had a part-time job, I was able to pay rent on time, and I had extra spending money for going out and shopping. But this was an unsustainable lifestyle because my balance at the end of the month was always a solid zero; I never saved up and I never invested my money effectively.

I planned a meeting with a financial advisor at my bank to discuss saving up in October this year. She asked me numerous questions about my spending habits and what I wanted to save up for. At this point, I realized that I did not know how to save up money; this wasn’t even a thought that had crossed my mind. Why should I budget? Why should you budget?

Well, budgeting has curbed my overspending. By setting a fixed amount of money for new clothes, groceries, and going out, I never surpass my monthly limit. Therefore, I have fewer regrets about where my money is going.

Of course, budgeting definitely helps you save money. This is probably a given, but it’s so overlooked by people who don’t budget. Since I have a rough estimate of my monthly income (from my job and from tutoring younger McGill students), I subtract my spending and arrive at a positive balance. I can always expect to save a set amount of money each month, which is then deposited into one of my mutual funds’ accounts or tax-free savings accounts (TFSA).

Budgeting also helps you reach your goals. Whether you’re saving up for next month’s rent or a new car, keeping track of your spending ensures that you’ll be able to control your assets. You can plan for longterm investments successfully.

It’s not a rigid science, either. Budgeting is flexible and you can move money from one category to another. For example, I spent more money on going out than on groceries in December to celebrate the end of finals! As long as you stay within your initial margins, you can loosen the boundaries between spending habits.

In the end, budgeting is indeed very simple. Use whatever budgeting strategy works well for you; it can be a complicated Google Sheets document or a checklist on your phone. Implementing budgeting strategies does not necessarily take a long time but the effects are lasting.

Be Sociable, Share!

Comments are closed.

Blog authors are solely responsible for the content of the blogs listed in the directory. Neither the content of these blogs, nor the links to other web sites, are screened, approved, reviewed or endorsed by McGill University. The text and other material on these blogs are the opinion of the specific author and are not statements of advice, opinion, or information of McGill.