There are many professionals who are trying to give advise to anyone who will listen on learning how to save on a budget for their future. (Betsy Johnson/Lariat)
Minimum wage officially hit $10 an hour in Southern California. On average anyone working for that makes $1,600 a month working 40 hours before taxes. This adds up to roughly $19,000 a year give or take. So learning how to budget on such a small amount can make living difficult.
Most rent prices for a one to two bedroom apartment average about $1,600 a month depending on location. Add in how much a person makes can mean most of their money goes straight to rent. So then that person has to work out a new plan. Get a second job or a roommate, bringing the rent down to about $600-700 a month.
Saddleback College student Bianca, 19, is a personal assistant for a real estate agent making above minimum wage says she is not worried about rent right now because she is able to live with her parents.
“I try to save a decent amount of money, but I really only pay my car payment, it’s nice not having to worry about rent, but I still spend it on going out,” Bianca said.
Along with not worrying about rent for some students, they don’t have to worry about food while living at home. The average cost for a food bill every month per person is between $75-150. Depending on what is in the daily diet, shopping locally or organically can make a difference in how much one spends. Even junk food can become pretty pricey.
For Sonny, 19, who works at Target makes above minimum wage and is able to save so much money by living with his parents only paying for food and car insurance.
“I don’t make $1,600 a month but I am looking to move out and I will need roommates,” Sonny said.
After thinking about rent and food, what else is left? Well, there is car insurance, cell phone bills, gas, electricity, water and trash. And depending on where a person lives depends on the cost.
For a car on average it ranges from about $150-250 with gas included, that also depends on whether or not a lot of driving is occurring. And whether or not the car is nicer or junky. Newer nicer cars tend to cost more in insurance, but might save more in gas, where as older cars can cost more in gas and having to be repaired half the time.
Utilities are one of those other expenses that people don’t think about while living at home. Leaving lights on all day or letting the water run not only is a waste but it empties the pockets pretty quickly. The average cost to have someone come pick up trash, have running water, lighting in rooms and gas averages around $75 give or take.
Now here is the kicker, Internet. That’s right the Internet cost money. In order to watch T.V. go on YouTube or check Facebook costs between $60-100. Then there is the notorious even cell phone bill that has to be paid every month. That averages around $50-100 per person also, depending on the needs that people require to have on their super fast smart phones.
Now for most college students these bills are not fully a problem yet. Although, one day it will be. So there are some professionals out there who have given a few tips on what to do for the future.
First while living at home, take advantage of that. Any money that would normally be spent on rent, give to your parents and have them keep it in a safe place that is secretive to you, then forget all about it. Make sure while doing this, the utilities are included.
Second, make sure a savings account is filling up with cash every month. Most professionals say 10% but some might suggest more while being expense free.
Third always have an emergency fund. Dave Ramsey who is an expert in saving money, recommends an emergency fun starting at $1,000 dollars and to be sure to keep adding to it as often as possible. Cars do brake down, people do get sick or hurt and can not go to work for a few days to even a few weeks. Make sure there is something to fall back on.
“The thing I have discovered about working with personal finance is that the good news is that it is not rocket science. Personal finance is about 80 percent behavior. It is only about 20 percent head knowledge.” Dave Ramsey quoted.
Fourth make a money date. CNBC suggests that sitting down once a week to update your budget and tracking your progress will help improve financial goals.
Fifth, get creative with gifts. Instead of spending money on something, make it. Go on DIY sites and learn how to put a purse together with an old t-shirt or build a picture frame from wood that is sitting around.
Sixth, choose quality over quantity. Applying to food, apparel, electronics etc. Doing this will save people money in the long run making it so the same item is not being bought repeatedly.
Seventh, read a personal finance book. When learning about personal finances it will help in learning more strategies, making it easier to save when trying to accomplish future life goals.
Eighth, balance the YOLO life. Often people fear they will be missing out if they don’t spend money when doing something amazing, making it so they go overboard on events. While it is important to live in the moment, having a secure financial future will pay off in the long run. Keeping an eye on the prize is key for comfort.
Ninth, tracking the progress helps maintain money growth. Doing this day, by day can help reach the 20% savings that is needed to have a comfortable future.
Tenth, buying the generic brand while shopping helps with cost. There is no need to spend extra money on name brand items.
Eleventh, set up the savings account to be automated. When that paycheck comes in a certain amount automatically disappears into savings.
Twelve save the coins. Change still carries value, so putting extra coins into that little piggy bank adds up quicker than realized. Having that extra jar of change also helps for rainy day funds or pop up emergencies.
Thirteen, stay busy at work or school. Doing so will keep the mind distracted, making it harder to go out and shop emotionally or out of boredom.
Fourteen, stop buying objects that are out of price range. Do not put certain items on credit or lay away. Then mostly interest is being paid. Instead put money aside for that particular toy, then once the money is there it can be purchased.
Fifteen, pick a cheaper school. Even though it is tempting to have that elite university on a diploma, staying in the budget to pay for school is better than graduating with debt that can barley be paid off.
The chair of the accounting department David Bowman said this situation is both a geographical and occupational issue. He believes that both should be studied across major sections of the country and various cities that have their own unique opportunities.
“One of the major weaknesses of the USA population is the lack of focus on saving on an regular and consistent basis. This is a habit that needs to be developed just like any other habit. The most important first step is consistency. Many financial planners ask their clients to track ever penny they earn and spend for 30 to 60 days in micro detail,” Bowman said.