A Parent’s Guide to Setting a Successful Budget for a College Student

The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.

 You are getting ready to send your child off to college. Before you start helping them pack their belongings, there is one thing you need to do.

You need to help them create a budget. You need to teach them how to manage their money so they can learn the tools they’ll use long after they graduate.

WHY DO COLLEGE STUDENTS NEED A BUDGET?

The truth is everyone needs a budget. It does not matter your age. If you are dealing with money, a budget is necessary.

  1. Allows you to control your money. Rather than your money telling you what it wants to do, you get to tell your money where it needs to go. You are always in control when you have a budget.
  2. It teaches financial skills. A budget helps ensure that expenses such as rent, tuition, food, insurance, transportation, and housing are paid – before spending money on the fun stuff. (It also helps to make sure you don’t spend more than you make.)
  3. Makes you aware of where your money goes. When you use a budget, you see how you spend. It is very simple to see if too much is going toward dining out when you should be building your savings.
  4. Helps you track your goals. You need to cover expenses but you should also work on building savings at the same time. Your budget allows you to not only see those goals but track them in real time.

DOESN’T A BUDGET MEAN YOU CAN’T HAVE FUN?

Not at all! If anything, your budget will allow you to have guilt-free fun.

For example, the budget may allow you to spend $50 a week dining out. That means you can go to dinner with friends once (possibly twice) a week and enjoy yourself. You won’t be left wondering how you are now going to make rent.

WHAT TYPE OF BUDGET SHOULD YOUR STUDENT USE?

There are various methods of budgeting such as the 50/30/20 and the zero-based budget. For most college students, the zero-based is the simplest and easiest to follow.

The reason is that you track everything. You give every penny a job. That means if you earn $1,500 for the month that you “spend” the entire $1,500.

You will first cover the needs (food, shelter, transportation) and then your wants. If there is money “leftover” after this is done, it can be added to your savings.

You can use other types but if you have never budgeted before, using this method is the simplest.

WHAT SHOULD A COLLEGE STUDENT INCLUDE IN A BUDGET?

The budget will vary for each person, as the income and expense will be different. However, these are the most common categories that need to be included in a budget:

  • Rent
  • Renter’s insurance
  • Car payment
  • Car insurance (also saving for annual renewal fees)
  • Food
  • Clothes
  • Utilities (phone, electricity, gas, water, etc.)
  • Tuition
  • Fees
  • Entertainment (movies, games, concerts)
  • Dining out
  • Emergency fund savings

Again, you may have items that are not included above or see some that you do not need.

However, the most important thing of all is that every penny is given a job. Account for everything you will spend each month so you never have too much month and not enough money.

HOW DO YOU KEEP TRACK OF YOUR BUDGET?

For most college students, apps or digital trackers are the best options.  But, before you rush and sign up, keep the following in mind.

  1. Cost. Many apps are free and they will work perfectly fine. Other apps have a monthly fee attached to them. If you plan to use one of them, make sure you include that as one of your regular expenses. However, do not let the cost alone be a single factor when it comes to clicking the sign-up button.
  2. Security. Your security trumps all else. You need to make sure the app uses encryption as well as two-factor authorization.

Some of the best apps include:

  • Mint
  • You Need a Budget (YNAB)
  • PocketGuard
  • Mvelopes

However, your student may also like the traditional paper and pencil method – and that is OK as well.

Find the right one that works best for your student. That is all that matters.

TEACHING THEM TO BUDGET

Knowing you need a budget and where to track it is just the beginning. You need to teach your child how to budget.

Start by looking at each category that they need on their budget. You may already know the cost for each category but if not, you may need to make phone calls or do research to know.

For example, you know the rent for the apartment is $850 a month but how much are the average utilities? Ask the manager for these costs so you can include them in the budget.

Next, decide how much they want to allow themselves to spend on food. Show them how much a meal costs for a single person at each restaurant you eat at so they can create an average.

You will then have them decide how much “fun money” they want to include as well. You can base this on them wanting to go to the movies two times a month, one concert a month, or attending three events.

Now you can see the expenses for your student. Add their income to the budget and deduct the expenses. They will see if they are operating in the black (money left over) or in the red (spending more than they make).

Show them how to adjust the numbers by increasing their savings or lowering the amount they can spend on clothes – until the budget equals zero. Zero meaning they are spending every penny they earn.

And making them keep track now will help ensure they stay on track well into the future.

 

 

 

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Source: pennypinchinmom.com

Is a Sam’s Club Membership Worth It Just for Gas?

The post Is a Sam’s Club Membership Worth It Just for Gas? appeared first on Penny Pinchin' Mom.

From chicken drumsticks to paper towels or even a trampoline, you can find just about anything at warehouse clubs like Sam’s. But what if you don’t have any use for a 10-lb bag of sugar or 32 rolls of paper towels?

If you drive a lot, a Sam’s Club membership may make sense just based on the gas savings alone. Let’s look at some numbers.

How Much Does a Sam’s Club Membership Save on Gas?

A basic Sam’s Club membership costs $45 per year and gives you access to the gas stations at all warehouse club locations. However, Sam’s Club has been running promotions to entice people to join so you may pay less than the membership sticker price. (And check to see if Groupon has a deal on membership as it often does.)

Depending on the membership savings you score, the following math may work even better for your situation.

To run this test, let’s assume that you drive a Toyota Camry and you fill-up the 14-gallon tank with gas once a week. This means you go through 728 gallons of gas a year. We will assume that Sam’s Club gas costs on average $0.10 less than other gas stations.

This means you will save around $73 per year if you fill up your car only at Sam’s Club gas stations. If you also get the Sam’s Club Mastercard, you will get an additional 5% back on gas purchases on the first $6,000 per year then 1% after.

For this calculation, we will assume that gas costs $2 a gallon. If you go through 728 gallons per year and you fill up on gas at Sam’s Club using their credit card to pay, you will save $145.60. Subtracting the cost of the membership ($45) gives you savings of $100.

If you don’t get the Sam’s Club Mastercard, your savings come out to a more modest $28 per year.

The difference between the price of gas at my local gas station and at the nearest Sam’s Club is even bigger in my neighborhood. My local gas station is charging $2.05 for a gallon of regular gas while the Sam’s Club gas station sells the same gallon for $1.89.

Here’s a screenshot from the GasBuddy app showing the most recent prices for both:

That’s a difference of $0.16, which would increase the savings. However, the nearest Sam’s Club gas station is almost three miles away, which would eat into my savings and make it more inconvenient. (You can mitigate that by getting gas when you actually shop at Sam’s, which should save you money compared to a regular grocery store.)

Does it Make Sense to Get a Sam’s Club Membership for Gas?

If you drive a big car such as a truck or an SUV, the $0.10 – $0.15 per gallon you can save with a Sam’s Club membership can make a difference. This is also the case if you drive a long way for work, so you need to fill up more often.

One thing to consider is the location of the nearest Sam’s Club gas station. If you have one on your way to work or close to your house, getting a membership to save on gas could make sense.

However, if you have to drive several miles each time to fill up on gas, this will cut into your savings. The inconvenience factor will also make it less likely that you will use the Sam’s Club gas stations.

Warehouse clubs can also be a great place to get deals on other items for your household. If you have a family, you can easily save more than the annual membership cost on staple foods and household goods.

Do you have a Sam’s Club membership? Have you found it worth it just on the gas savings alone? Share your experience in the comments. 

–Veneta Lusk

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Source: pennypinchinmom.com

Managing Multiple Financial Accounts in a Single App: Personal Capital

Personal Capital gives you the tools to understand your financial situation — and you can use that information to reach your goals. Here’s how.

The post Managing Multiple Financial Accounts in a Single App: Personal Capital appeared first on The Dough Roller.

Source: doughroller.net

5 Pretty Easy Ways to Save Money on a Vacation

The post 5 Pretty Easy Ways to Save Money on a Vacation appeared first on Penny Pinchin' Mom.

Do you have high hopes that there will be traveling your family’s future, but not quite sure how you can afford it?

You’re not alone. While Americans will spend an average of 10% of their household income on vacationing this year, a full 74% take on debt for their trips. Each of these tips offers you both an easy and effective way to save a substantial amount of money off your next vacation trip. Use them wisely, and you might even be able to squeeze in some extra travel this year.

1. Make use of grocery store prepared food sections

Some people think it’s crazy to not eat at restaurants for all of your vacation meals. Mostly, they want the entire week off from cooking any food.

I don’t blame them (or you) for thinking this. So, what if I told you that you can still avoid cooking all week, and not actually eat out for every single meal?

While vacationing, find your local grocery store with a prepared food section. You can find hot meals for your family – complete with salads and desserts – for much less than what it would cost to eat out. Plus, there’s’ no need to pay a tip.

2. Plan activities around discount times and coupons

You can easily save a bundle on your vacation expenses by planning your activities around available discounts. This doesn’t have to be as limiting as it sounds, it just means you have to be smart about it. For example, you could:

  • Buy a local Entertainment book and use the tourist coupons that come with it.
  • Purchase discounted tickets to local attractions and activities on group buying sites (such as Groupon.com, and LivingSocial.com) by entering the zip code of where you’ll be traveling to.
  • Plan your trip dates around free museum days (I did this on a trip to France, and got in to see the Louvre on its free Sunday of the month).

3. Change the season you travel in

One of the easiest ways you can save on almost all the costs of your next vacation is by simply changing the season that you take it. The time of year you choose makes a huge difference in how much you’ll pay – it’s a simple illustration of supply and demand.

During summertime when kids are out of school and families want to get their vacations in, you’ll pay more. But if you decide to leave for a trip to Disney World one week before schools traditionally let out? Then you’ll not only save yourself tons of waiting time in lines but a lot of money.

In fact, that’s what personally happened to me over five years ago when my husband and I decided last minute to drive to Disney World. It was May, and there were virtually no people around. No lines, no waiting, and hardly a kid in sight.

We asked anyone we could find what was going on, and they said that it would be all-out pandemonium just one week later when their peak season begins (when the majority of kids are out of school). We had unknowingly hit the jackpot, and our cheap hotel bill reinforced that!

Get creative by using winter breaks, trips during the school year, and long weekends in the off-season to save a bundle without even trying.

4. Rethink traditional hotel stays 

Next to transportation costs to get to your destination, hotel costs will make the second biggest dent in your budget. With an average cost of $133.34/night to stay in a hotel, you can see how a 5-night ($666.70) or a 7-night vacation ($933.38) can really add up.

One of the easiest ways to save on vacations is by rethinking traditional hotel stays.

Consider options like these, all of which I’ve done myself:

  • Staying with family or friends
  • Share a hotel room with family or friends
  • Book a rental with local homeowners instead of with hotels (using sites like AirBnB or Vrbo)
  • Use hotel deal sites to snatch up unfilled rooms (such as  Secretflying.com, and TheFlightDeal.com)

5.  Consider group travel

Traveling in groups allows you to pool your money for better rates. My husband’s family, for example, likes to go all-in on a beach house for a long weekend in Galveston. We generally get a 5 to 6-bedroom rental right on the beach, and the cost is just $200-$300 per family for 3-4 nights. If we were to travel on our own, we would never be able to afford such a nice place.

Not only that, but if your group travel entails a road trip, you may be able to carpool with someone to save on gas costs. And if you split up meal prep duties between families like we do? You not only have to cook only once or twice per stay, but you don’t have to eat out in restaurants the whole time.

Another way to secure travel savings in groups is by going after group discounts. Whether booking excursions, airfare, or anything else with a travel agent or by yourself, be sure to ask about possible group discounts.

Don’t forget to shop around

Pricing for hotels, airfare, and things to do can vary greatly. Don’t just visit a company’s website and assume that’s the best price. Check a number of sites — including discounters like Priceline — and look for package deals. You should also consider looking for less-traditional sources for booking trip. Warehouse clubs Costco and Sam’s Club, for example, offer deals on travel (sometimes very good ones).

It’s also important to use any discounts you have coming your way. Are you in AAA? Does someone in the family have a trade association membership that offers special deals? Check and you might unlock a special deal. Use these “work smarter, not harder” strategies when it comes to saving money on your next vacation, and you won’t have vacation debt lingering for months after your return.

–By Amanda Grossman

 

The post 5 Pretty Easy Ways to Save Money on a Vacation appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com