By coinnews 
00:00 Speaker A
A new study from student loan company College Ave found less than half of college students kept a personal budget while in undergrad. Whether you’re in the majority who have never kept a budget or a parent looking to prepare your child for the real world, don’t worry. As part of our theme week, the class of 2025’s financial playbook, we’re getting back to the basics of budgeting. Here to help, we’ve got budgeting expert Andrea Warrock. Great to have you here with us. Okay, so first, let’s just start basic perhaps. What what advice would you give someone who’s never had a budget before?
00:41 Andrea Warrock
Well, thank you for having me. Uh well, a budget is such an important tool to help you reach your financial goals. And the most important thing that I want any viewer and thinking right now is to reframe the way you think about a budget. A lot of people look at budgets as being restrictive, not allowing you to live your best life, not allowing you to enjoy certain expenses or purchases. But the reality is a budget can give you flexibility and freedom. It allows you to really pay attention to where your dollars go. So nothing is being wasted. Um, and you know, that just allows you to be more, um, allows you to really create the lifestyle that you want. And so to begin with your budget, you really need to figure out are you living within your means? Are you spending more? So write down your take-home pay, list out all your expenses, your necessary expenses plus maybe an average spend on those expenses where they are, you know, fluctuating from month to month. And then this gives you a snapshot of how you’re spending, and now you can begin creating a plan to cut back in the areas where you’re over spending. Remember, you cannot change what you can’t see. So writing it all out on a piece of paper or an Excel chart is a great place to start. And of course, there are budgeting apps as well that can help you out.
02:51 Speaker A
Right. And so if you’re looking to build a budget that will last, what are some ways that people can stick to their personal finance plan?
03:05 Andrea Warrock
Right. Okay, so first of all, maybe determine what kind of budgeting method works best for you. There’s a rule called the 50 30 20 rule, and this assigns 50% of your expenses towards those necessary bills like rent, mortgage, health care, gas, food for groceries, 30% to the lifestyle expenses like entertainment, vacation, gym memberships, and then 20% to savings. I like to save before I pay any of my bills, so I know that I’m reaching that goal. Now, the most important thing to sticking to your budget is making sure that you are actually paying attention to where your money is going. And so I mentioned budgeting apps are a great tool to ensure you’re sticking to your plan. I like Rocket money, there’s also you need a budget or pocket guard. All of these link all your financial accounts in one place. So if you have multiple credit cards or checking accounts, savings account, you can see it all in one place. And this way you really know where your money is going that you’re sticking to those spending categories that you set for yourself. Um, and also, you know, this doesn’t mean you can’t spend on certain expenses, but just be really savvy on how you are spending. Make sure that you’re comparing prices, make sure that you’re applying coupon codes when possible. And then also shop at stores that offer affordable options. I like stores like Dollar General. They post thousands of items in their value value that costs just a dollar or less. And you can access this through their app. And this is going to be for groceries, personal care items, health care items. This could really help you stretch your dollars, stick to your budget. And this is a good tip for anybody out there who feels like, well, they’re being deprived, like, you know, they don’t want to cut out all those Starbucks purchases or maybe, you know, going to the movies and those types of things. Tap into the free rewards that you get from credit cards, retailers, or even apps. This is a great way to indulge in a splurge without derailing your budget. Yeah. So for instance, make sure you’re using a robust cashback credit card. I like the bread rewards American Express credit card because it offers 3% back on groceries, gas, dining out, and your utilities. So you’re paying for those things anyway, earn that cashback. And then also use an app like fetch. This is a rewards app that will give you points for all your purchases when you snap a photo of your receipt, then you could redeem those for gift cards to Starbucks, Sephora, Amazon, and then indulge in a splurge again without derailing your financial goals.
08:05 Speaker A
Just briefly, we got about 40 seconds here. What advice do you have for parents of soon to be college graduates who want to talk to their kids about setting up a budget?
08:20 Andrea Warrock
Yes. So I think it’s really important to talk with your soon to be graduate about what their goals are. Are they planning to try to find an apartment to live on their own? Are you going to help them out by allowing them to live at your own home? Um, even if they are living with you while they look for a job, this could be a good opportunity for them to get a little bit of experience of what it’s like in the real life. Maybe you could charge them a small rent, maybe they can contribute to the household bills, sit down with them and show them what different things cost so that, um, they could start preparing for that reality in the future that’s yet to come. Also, this is a good time to also start thinking about student loans, when are those repayments going to be in effect, and making that part of the plan as well.
09:23 Speaker A
Andrea, thanks so much for taking the time here with us. Really appreciate it.
09:27 Andrea Warrock
Thank you for having me.