Updated: Dec 3, 2020
Remember the good ole college days? Those years when we didn’t have much money, but still figured out how to eat and get drunk? We learned some of the most valuable budgeting techniques in these formative years.
I’m an Adult Now! I Deserve to Live Like One!
As soon as we get our first job and enter the work force as an adult, we seem to forget what it was like to be poor. We buy a nice car, nice clothes for work, or some nice furniture that doesn’t smell like “that Craigslist guy.”
Now we’ve got student loan payments, a car payment, and sprinkle on a little credit card debt for fun. Don’t forget, now we’re going out to restaurants or bars with friends to feel like a real adult who drinks expensive cocktails instead of Bud Light from a keg.
Living on $100 Per Week in College
I had various work-study jobs back in the day that paid me about $100 per week. This was all the money I had to my name. My father was kind enough to sponsor my rent when I wasn’t interning. That $100 covered all of my expenses for the week (food and beer) and also covered my shared utility bills.
I lived on rice and beans, pasta, ramen noodles, sandwiches, and light beer. A vast majority of my money was going to beer. If I needed toothpaste or it was my turn to buy toilet paper, I had less money to work with for the week.
The $0 Day Strategy
A budgeting strategy I like to use is to have as many $0 days as possible for the month. This means that you spend $0 for the whole day. If you break out how much money you spend per month aside from bills and rent, you will see how much you are allowed to spend per day.
If you make $60k per year ($4k per month take home pay), and pay $1,500 per month for rent and bills, your monthly disposable income is $2,500 per month. Let’s say you also wanted to save $1,000 per month. $1,500 spending cash divided by 30 days is $50 per day.
Every day that you can spend $0 means that you can spend $100 the next day. If you can make a string of $0 days, you can build a surplus of extra cash, which you can use to save more or pay down debt.
If you can, buy in bulk for things that you spend money on in a given month. Buy a 36-pack of toilet paper; this saved my ass (literally) at the start of the COVID-19 Pandemic. Buy 2 for 1 deoderant and toothpaste. Look at the per-unit price of items at the grocery store to see what gives you the best deal. Shop off-brand items when possible. If you’re going to drink beer, buy a 30-pack. If you’re going to drink whiskey, buy a 1.75 liter handle.
Why Should I Budget Like a College Student?
Because your future depends upon it! If you value traveling, these techniques can help you buy a plane ticket, just by having a few $0 days! These small changes can have profound effects. Being frugal and smart in small places can give you more freedom to spend money on things you enjoy doing. These strategies can help you get out of debt faster. They can help you save and invest more money to create financial independence.
Everyday millionaires aren’t driving around brand-new Teslas or Lamborghinis. They are the guys driving used vehicles for 30 years, who have been smart with their spending. They are humble and conservative and have piles of cash invested. Being flashy on the outside is not necessarily a sign of wealth. Be flashy on the inside and build your wealth!