2014: Your Budget

By Lev Novak

A new year, some new resolutions. And some sweet, sweet cash money.

Of course, figuring out how to handle your money can be a difficult situation, and many of us never think too far ahead. Fortunately, a new year means a new slate of opportunities to sit down, settle up your debts, and figure things out.

I know, I know; thrilling. But you’ll be glad you did it.

1. Rank Your Debts

Unfortunately, many of us have more debts than income. This means that we have to figure out how to spend our hypothetical money in hypothetical money-pits even before we can think about hamburgers. And since I love to think about hamburgers, I feel your pain.

The first thing to do is to examine what you owe, when, and with what urgency. Student loans are often huge but un-urgent compared to, say, your rent. That said, depending on the interest rate that they charge, it can behoove you to focus on paying off your loans first. If you owe ten-thousand dollars to two people, the difference in interest rates- three percent or five percent, for example- could manifest themselves in actual money. The two-percent difference is two-hundred dollars on that loan, and if it’s two-percent a month, that’s two-hundred a month that gets taken away like water in air…before you even dent the loans.

I know, I know; it’s the worst. I didn’t invent them.

Pay off high interest loans after you have your immediate debts- like heat, housing, and basic food handled. Next, comes…

2. Breathing Room

Life happens.

Even if you make a perfectly manicured budget, and you live a totally boring life on bread and water, things will happen. They can be boring things- you ran out of laundry detergent and need to get some more- or more exciting things, like your date is going really well and you need to buy some gum right now because your breath is terrible.

Unless you’re a crazy person, you forgot “gum” and “laundry detergent” in your budget. Other things you may have missed; a replacement phone charger for when yours breaks, shampoo, more shampoo because your room-mate keeps using yours, a parking ticket that’s totally unfair and more. The point is life is unexpected, and if you don’t know that, you’re going to have a bad time. In any budget you make, give yourself some breathing room.

3. Prioritize

After the un-fun stuff- rent, gas money, student loans- you can begin to think of fun uses for your money. And that means prioritize.

What brings you the most happiness for the least money? Cheap beer is a popular (21+) choice in college, but be creative. A Netflix account is cheaper than even one night out, and it’s a lot more useful. A five-dollar beanie might be exactly what you need in the cold, and it’s a lot cheaper than freezing every night. A coffee-maker might pay for itself over time, and if you really enjoy it, that could be a fun way to save money that feels like a gift to yourself.

Thinking of good ways to spend money means more room for the new year for hidden expenses and to pay off loans. Being responsible often means just being prepared, so make a basic budget today and try- just try- to work with it. Who knows? You may even like it.

Okay, you won’t like it. But your wallet might.

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