Brad Jakubowski
After School Budgeting
With high school coming to an end for many of us, it’s important that we all start considering a budget plan to follow while getting our major(s) in college. Regardless if you plan to go out for college, go directly into the workforce or try your luck with the military creating a budget would be best for any person as it prevents a common problem of high school graduates as most aren’t usually taught how to create a budget. Creating a budget isn’t just necessary for only college students, but many adults have budget plans that they use all the time.
The graph below, from Jeremy Waller’s Sample Average Monthly Budget for a Single Person or College Student, you can begin to understand what is needed when creating a budget.
This graph is measured under the assumption that the person is making at least $10/hour working 40 hours a week. Therefore by creating a budget that utilizes all $1,390 earned each month. This chart also includes one less necessary but still common variable that people tend to overlook, Charity receives 10% of the monthly budget, however this, like others (i.e: Savings, Food, Gas) could be changed depending on the circumstances of the individual. It’s also good to note that rent receives a large amount of the budget, this is because many college dorm as well as apartment costs have greatly increased throughout the years.
Through relation of the graph, there are a multitude of sources that state the same information on how to properly form a budget, calculate how much all living expenses will cost, then by comparison to how much you make each month you can calculate if you aren’t making enough, just enough, or an excess amount. With this you can effectively choose whether or not to live in a dorm or apartment, how much extra spending or extra savings you could potentially have. This would then allow the better living styles for after college as with the previously gained knowledge you’d be able to accurately create a new budget to live off of.
Works Cited
“How To Make a Budget: A Primer for College Students.” CollegeinColorodo.org.
cicmoney101.org. Web. 15 Feb. 2015.
“Get Prepared for Life After High School.” Mapping Your Future. mappingyourfuture.org. Web. 10
Aug. 2010. 15 Feb. 2015.
Driscoll, Emily. “Six College Budget Busters Every Student Should Avoid.” Fox Business.
foxbusiness.com. Web. 1 Oct. 2012. 15 Feb. 2015.
Waller, Jeremy. “Sample Average Monthly Budget for a Single Person or College Student.”
Personal Finance Whiz. personalfinancewhiz.com. Web. 20 Sept. 2011. 15 Feb. 2015.
I like the chart you used and I liked how you explained it and what it meant. I think that it is interesting that most people spend most of their money on rent. I also think that it is good that our society is actually donating money to charity rather than spending it on things they don't need.
ReplyDeleteIt's scary to see that almost 1/5 of my money goes to car related expenses. I wonder how much I could save by just moving to a closer location to where I work, go to school, and areas I hang out. And with this money saved, I would have even a greater percentage to donate to charity!
ReplyDeleteIt's scary to think that in less than a year, we will be on our own and having to pay for our own bills. I agree the smartest thing to do during that time is to set up a budget, to ensure that you aren't spending money that you don't have or didn't plan a head of time to spend. The one thing I noticed about the chart you provided was there was no percentage for leisure. Are you trying to say that when setting up a budget, you should only take in account the actual bills you have? I would think it would be wise to set up money for other things that you may, but don't actually need,
ReplyDeleteIf you are only making $10/hour, it would be recommended that you approach the donations to charity with caution, as you aren't pulling in any more than $20,800/year. It would be very hard to live even individually on that, charity is important but so is you know living and being able to even get the money in the first place. Preparing a budget is very important however and accounting for donations and such with a limited income should probably come from previous money left over (if any). It should also be remembered that the left over money can be saved for any large, unplanned expenses.
ReplyDeleteThe graph you chose to show what percentage of our monthly earnings goes to which area of costs was quite an eye opening graphic. With things like healthcare and rent taking such a huge chunk of our profits it is clear to see that in this age of expenses, it it truly necessary to use such a simplistic system like budgeting. While I do enjoy the overall detailing of what goes where, the one category I find somewhat lack luster is charity for that in a perfect world where everyone has enough money to go around the idea of giving some back to the community is quite dandy, yet it is not that type of world and many people struggle to have enough for themselves let alone others. Overall the message of your post is very relevant to us seniors, though I don’t think we should worry about charity just yet in our youthful states.
ReplyDeleteThe graph was very useful for understanding the information. As you said, there are a lot of choices that could be made as far as spending your money. For example, apartments and dorms each have their own advantages and disadvantages that could impact your overall budget. I agree that having a budget is important so that you can plan your expenses wisely. I thought it was interesting that the graph included charity in the budget. Many people struggle to provide for themselves because of college expenses, so they don't have enough money for charity.
ReplyDeleteThis is an interesting topic for many of us considering graduation is right around the corner. The problem is, many high school graduates do not know what it is like to manage money as they have relied on their parents throughout their entire lives up to this point. This is why it's a great idea to create a budget plan or at least a set of guidelines that you should adhere to, making sure that you are not overextending your purchasing power. It is important that we learn how to manage money and that we are able to balance what we have with what we want.
ReplyDeleteThe graph that you provided perfectly illustrated how a bunch of smaller payments can add up quickly into a huge portion of any gained income. Additionally, your point that modern high school students are unprepared to create a budget is extremely true. We are woefully unprepared for moving into the real world and becoming self-sufficient.
ReplyDeleteThis is a great visual for people who don't quite know what it will be like to budget their money once they get out of high school. It shows how money is really used up fast once you start earning it, and that people do not have unlimited money to just spend on whatever they want. This graph doesn't take into account though that people need to have an emergency savings as well for if something goes wrong or they need cash in a flash. As we all move toward becoming our own people though it will be necessary for us to learn how to budget our money, it would too be a good idea for all of us to make a graph or spreadsheet for ourselves too.
ReplyDeleteI agree and think that budgeting is a very serious issue for most people, but your illustration is completely un relatable to most people. I don't know many college students that are donating 10% of their income to charity, or leasing and paying off a car. This seems a little far fetched as far as what pople really spend their money on though I do get the main idea of your post and agree that we need to learn how to budget our money because now a days there are so many excess luxuries that we want that our paychecks go by pretty quick.
ReplyDeleteThis is a very good topic since most of us are graduating this year and need to start thinking about budgeting. From looking at your graph for an average college student or person who has to budget, I do not think that everyone donates 10% to charity. I think a lot of us should to help a cause but especially with college and all of the expenses there I don't think that is reality. However your graph was very easy to read and understand and helped myself get a real look into the world or budgeting was going to be when I leave high school and have to soon live on my own. Nice job with picking a relatable topic for most of us!
ReplyDeleteI agree that making a budget plan for after school is a great idea, it is crazy to think that about 18% would go towards car related payments. So would taking the bus increase the savings and make how much you spend go down.
ReplyDeleteYes, most of us are Graduating this year and we need to start thinking about college and money. We are going to start new life in college. We should depend on our self. That graph so easy to understand and also shows that how we spend money in college. There are a lot of choice that could be made as far as spending your money. Apartments and dorms each have their advantage and disadvantage that could impact for budget and also We spend more money for dorms.
ReplyDeleteIt seems quite advantageous to create a personal budget, and this need obviously would increase as income decreases. It’s interesting to see a real life display of a comparison between the marginal propensity to save (MPS) and the marginal propensity to consume (MPC). Even more interesting, however, is to see that the percentage of income that goes into charity is relatively high. I’ve never really thought about how much money the average person actually donates to charity, but I would’ve originally guessed a smaller fraction. Nevertheless, it appears that humans are decent, and are willing to allow others to increase their ability to consume or save money in the future.
ReplyDeleteI think that budgeting seems like a great idea especially for young adults. When people are going straight into college there are going to be a lot of new expenses like rent and buying their own food etc. Without budgets people can overspend by not realizing how much they actually have, but with a budget they can look at everything and make a conscious decision on what parts of their life deserve more money. I like the budget depicted in the graph, but I probably wouldn’t be donating that much money if any to charity, then I could use that for savings.
ReplyDeleteIt's actually really smart to think of a budget plan because I know that I will need money for certain things but I also want to be able to go on vacations and do other things with friends every once in a while. It is also a good idea to take in the fact that people wont have the same budget so they may have to spend more on rent and put less of their percentage of money in their savings.
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