Student - My savings are my budget - what should I do?
Hello, so I am currently a student and work during summer to save up money for the months I am in school (August - May).
I am now starting to make a budget for the school year, as the money I am saving up now will have to last me for a few months.
I am not sure how to go about this though, so far I have two methods I am considering:
1. Budget all important expenses until December (groceries, emergency medical fund, rent, phone and transport bills - I can cover this and have some left over in December). Then do monthly adjustments depending on how I spend compared to the budget (like sometimes those pesky school books cost more than I want them to).
2. Put the lump sum into tracking and withdraw monthly "income" and budget month by month that way - I find this harder to wrap my head around though!
I think either way I will keep what I haven't budgeted that month in my savings account (which is not really a proper savings account), and transfer what I plan to use monthly onto my card to make sure I dont fall into the trap of "needing to buy this thing I really don't need" - if I go out drinking I will probably move the money back to savings for the evening to make sure I don't go wild as well.
I am also not sure if I am getting a loan / scholarship this semester, so depending on that I will try to get a part time job (COVID19 might make this difficult ) and save that money for my living expenses past December.
So I guess I am asking which method is better, or if there is another method I have not thought of that might be even more useful, then I'd love to hear about it!
Putting the money into your savings account precludes #2. Most people put all the funds into an Income Replacement category up front, and then move a monthly portion into TBB when ready to budget for the month. I wouldn't budget out a bunch of months because priorities and spending understanding will change -- that's just more numbers to edit. I suggest you budget at the end of each month in Next Month's area.
You know you need to make this money last 10 months -- I strongly urge you to budget each month no more than 1/10 of the starting value. That mindset will serve you well, even once you have regular income. Each month should ideally stand alone, and unexpected expenses will mandate reallocation from other less important categories that still have money.