While nearly 75% of Americans have a budget, a startling 84% admit to regularly exceeding it, revealing a significant gap between intention and action. Managing your finances like a professional is an easily attainable goal, provided you are willing to learn from your financial behaviors and follow a consistent routine. As a college student, juggling school, a part-time job, constant bills, and a fulfilling social life need not be daunting. Let us discuss how you can be a budgeting savant and why maintaining sound financial principles is the key to a prosperous, stress-free life.

The importance of financial awareness

Being on top of your saving and spending habits not only rids you of the anxiety of missing a credit card payment or wondering if you have enough cash for an afternoon cup of coffee; it is about creating more options. Contributing monthly to a savings account or consistently limiting spending in your most expensive categories will allow you to take that vacation, go on a shopping spree, or even make a down payment on your dream car. A bit of discipline today can make a world of difference.

The three steps for managing finances like a professional:

1. Understanding your income and expenses

Knowing how much money is coming in and out is crucial to understanding your unique financial picture. Identify your income sources and categorize your spending. You can’t make big money moves until you know what type of numbers you’re working with. Using apps such as Goodbudget or Credit Karma is a great way to get this information quickly. If you are feeling a bit savvier, you can create an Excel spreadsheet; many detailed step-by-step guides are available on YouTube to structure the best model for your situation.

2. Setting achievable financial goals

Why manage your money like a professional if you aren’t working toward a goal? Creating goals for yourself helps motivate consistent efforts to attain your desired financial position. It is crucial to develop both short-term and long-term goals. It is easiest to differentiate the two by categorizing short-term goals as a year or less and long-term more than a year in advance. A short-term goal is to have enough money by the end of the semester to take a vacation with some friends, or to max out your Roth IRA this year. A long-term goal would be to add $10,000 to your net worth before you graduate or save money for a future down payment on a house.

3. Crafting your budget

After reviewing your income and expenditures per category, you must ask yourself, “Which of my expenses are wants and which are needs?” These are known as discretionary and non-discretionary expenses, respectively. Discretionary spending is the cost that you can survive without. Though challenging, you can survive without Starbucks every morning before class. However, expenses such as rent and the cost of filling your gas tank are needs and, therefore, non-discretionary. Set maximums for each category, such as $200 for dining out and $100 for entertainment, and perhaps you can indulge in your beloved coffee before class, limited instead to two per week. Based on the goals you have set for yourself, how can you spend and save to fulfill these desires?

The most important component of all of this is consistency. Creating a goal and setting a budget is only as good as your commitment. Remember why you are doing this. Setting goals doubles as a way to get you closer to where you want to be in the future and gives you motivation to do so. Sacrificing that purchase today might be a drag. However, you are not eliminating the happiness of those fun purchases. Instead, you are delaying gratification to a future day when the benefits are much more significant because you have options.

Don’t let anyone tell you that this is not achievable. Money is a finite resource that requires everyone, from the wealthy to the financially limited college students, to have a budgeting regimen, regardless of whether they make $10,000 per month or $500 per month. Embark on this financial journey today, and you’ll be amazed at how small steps can lead to significant achievements. Your prosperous, stress-free future awaits.