In the twelfth episode of Questions, Commons & Concerns (QCC), marketing assistants at University Student Commons and Activities asked students, faculty and staff, “Do you have a budget? And if so, what is your method of budgeting?”
Brian Donovan: Welcome to Questions, Commons & Concerns at VCU, an initiative by University Student Commons and Activities. Questions, Commons & Concerns is a series where we ask students, faculty and staff about their thoughts regarding current events, hot topics or fun subjects relevant to the University community.
Donovan: This is Brian Donovan, host of Questions, Commons & Concerns. Our first episode of the New Year is about budgeting. Joining us in this episode will be Lisa Mathews-Ailsworth, the advisor for Off Campus Student Services, or OCSS. OCSS provides resources for students including housing and roommate assistance, as well as bi-weekly budget workshops. Let’s find out just how much VCU students, faculty and staff know about their own budgets.
Donovan: Do you have a budget? And if so, what is your method of budgeting?
:: I don’t necessarily have a strict budget, I kind of just tell myself every week like, “Okay, this is what you… can buy up to this amount,” I guess. I try to tell myself you can’t buy more than like- you can’t spend more than like $200 a week.
:: No, not really because even though I have a job, it’s really hard to have a budget on minimum wage. I pay my own rent, so all of it really goes towards that. Then after I’m done with groceries, nothing’s left. So, I guess my budget if I had one would be like, just doing stuff that’s really important first, but I usually don’t have any money after that. That’s basically it.
:: I have no budget whatsoever. I just kind of check my bank account every now and then, and then I’m like, “Oh.” If the balance is a little low, maybe I should stop spending.
:: I do have a budget, but it depends on my paycheck. So I would take my savings out first… I don’t know like, my method is spendable money versus money I need to save for other things coming up like bills- bills is the most important thing. Bills and rent is the first thing I take out of my paycheck. Then, the spendable money which is less than all that is what I keep in my checkings.
:: Yes, always. I sit down and list my bills, and then what money is going towards the bills. And then I separate my savings and what specific saving category it’s going under. Like maybe I have a concert in mind so let me save for those tickets- Oh, but I have to save for a shopping trip I’m going to have, so I’m going to save for that- Oh, I have to save for gas for next week. I put that in the saving for gas section and then I separate my extra spending money.
Donovan: These all sound like great starts to budgeting. Lisa is going to explain a common method of budgeting, known as the ‘Envelope Method’.
Mathews-Ailsworth: The most common, or one of the ones that most people talk about, is called the ‘Envelope Method.’ It’s a David Ramsey method where you actually take a physical envelope, you put your cash in it for a category for- you can do it for a week, for a month, whatever you want. So, most people do it for a month of, “Okay, I’m going to spend $400 on groceries this month, so that’s $100 a week.” So they’ll put all the money into their envelope and then when they go to the grocery store, they’ll only take $100 with them. And that way- I mean $100 is a lot for a student, but anyways if you’re a family, $100. That way when you’re actually in the grocery store, you’re thinking about exactly how much things cost because you should leave your credit cards, leave everything else in the car. That way, when you get up to the register, all you have is that cash, and that way you’re more money conscious of, “Okay, yeah. I picked up this or that that was not- or that was name brand, when you could have saved by getting generic brands. It just makes you more conscious versus, “Okay, I’m going to get up there and swipe my card and that’s it.”
Donovan: If you had $250 right now, which is about one year’s worth of saving $5 per week, what would you do with it?
:: Well I guess if I saved $5 every week and by the end of the year I would $250, so maybe after two years or so, I can buy myself a new computer.
:: Just toss it in my bank account, along with everything else ‘cause I just don’t spend too much money, unless I have to.
:: If I had $250… To be honest, I would want to put it in my savings and then just use it for an emergency, like if I’m short on rent one month or something like that. Or, if I have like some hold on my account, something crazy like that.
:: Hmm, I’d buy shoes, or food.
:: I would want to save it, right? But I know I wouldn’t. I’d probably end up spending it on food, to be honest. And then clothes or something.
:: I’d probably save it because I don’t know. There’s nothing I really want right now, or like need super badly so I’d probably just save it until- I like doing things so I’d rather do stuff than buy things.
Donovan: Savings is always good to have, especially in cases of emergency. Speaking of emergencies, do you have renter’s insurance?
:: Yes I do. My apartment complex actually requires you to have renter’s insurance before you can even sign a lease to live there.
:: Yes I do. Yearly we only pay $100, so between the three of us, that’s only like $33 a year so that’s really cheap.
:: No, I actually do not. I didn’t know it was like, that affordable. But, I’ve definitely heard about it and I’ve heard of it, and I’ve consciously not checked the box that says, “Do you want renter’s insurance?”
Donovan: Even I was unclear on the benefits of renter’s insurance, until we spoke to Lisa about it.
Mathews-Ailsworth: Items that students think that they can get away without doing… is definitely renter’s insurance. That’s on average anywhere from $8 – $10 a month, and that will cover you in case anything happens to your goods. So if you think about- well, most students think that they don’t really have that much; however, if something happened and your house caught on fire, or someone stole stuff, to rebuy your clothes, your laptop, your books, your food- all those items do add up- your linens. So, the nice thing is insurance will cover you with all that. In addition, depending on the circumstances, if you start a fire or if you cause any kind of harm to your unit, to your building, whatever it may be, your insurance can sometimes cover all that. Once again, if you start the fire, probably not. But, if it’s an accident, then it will usually kick in and help you.
Donovan: Renter’s insurance is certainly something I’ll be adding to my budget. Paper plates, paper towels and plastic utensils grow increasingly less cost-efficient over time, as do other disposables. Do you feel like you are conscious of your consumer choices and spending habits?
:: I try to be. Like, recently more ‘cause we’re in college now. It’s not as easy to get money.
:: Pretty much so. I mean, sometimes I do the wrong thing and I’m aware of it, but like, who doesn’t?
:: I try to be. I mean I have a job, so I try to keep up with, you know, not spending too much and being on schedule with stuff so- I mean like, I have bought stuff like, off impulse. You know, sometimes I go thrifting and stuff like that. Or, I don’t know just dumb stuff sometimes, but it’s nothing that’s gonna really, really hurt me because my mom always tells me, “You gotta save and be smart about your money.” So, I try to listen to her so yeah.
:: I’m not and I’m hoping that the money that I have in my plan is gonna last throughout the rest of the semester. And, when it doesn’t, I might have to make that hard choice of- start cooking in my dorm, you know?
Donovan: At the end of the day, you are the one deciding when and how you spend your money. What is the most important factor in spending money on something, need or want?
:: Probably a combination of both need and want. ‘Cause I would say there’s a lot of times like, I don’t buy stuff that I want but, I don’t know. It just kind of depends on what I’m doing and the circumstances.
:: Probably want, if I’m being honest.
:: It depends. So, if I walk into Walmart, I will get what I need because I went in there with a list. Now, if I walk into the mall with one thing in mind, I come out with maybe five. That’s because I’m stressed. When I’m stressed, my stressed mechanism is to shop. I feel the need to spend money, so I try to avoid malls when I’m stressed.
Donovan: Lisa has some great steps on how to get started with budgeting and being conscious of where and how you spend your money.
Mathews-Ailsworth: Cool so, the most important thing I think is to start looking at your budget and figuring out where do you spend a lot of money in the same place and where you can kinda cut that down. So say you’re eating out twice a day. That adds up real fast over time. I think it adds up to something about $16,000 for the year, so that’s a lot of money you can cut back. Even if you just take one meal out at $12- Take that $12, go to the grocery store. You can probably get enough food for at least three meals. Or, if you’re one of those people that want to pack, but just don’t have the means to do it, take that $12 and go buy a fancy lunchbox or whatnot.
Donovan: Whether it kick starts your creation of a budget, or just gets you focusing a bit more on your finances, we hope this episode was as informative for you as it was for us. Thank you again to Lisa Mathews-Ailsworth and Off Campus Student Services for the plethora of advice and resources. Be sure to check out their website at offcampus.usca.vcu.edu for budget workshop dates and contact information to schedule an appointment with Lisa today.
Donovan: This has been Questions, Commons & Concerns at VCU, brought to you by University Student Commons and Activities. If you have a question or topic you would like covered, email us at contactUSCA@vcu.edu. Thank you for listening.