Saving and planning makes fiscal sense

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By Jennifer M. Ytuarte

sac-ranger@alamo.edu

Having a budget is important because it will help build savings to help students prepare for emergency expenses, a department chair said.

“Pay into your savings fund first at least 10 percent of what you make,” said Val Calvert, business, administrative computer technology and criminal justice chair. “Treat it like a bill and pay into it before other bills and impulse purchases.”

Calvert said organizing expenses can help keep late fees at bay.

She keeps an Excel spreadsheet of all her bills, their due dates, amounts due and total amounts due. She began this behavior as a teen, keeping a ledger of her paychecks and the items she wanted to buy.

“We need to actually look at what our obligations are,” she said. “Maybe when we get paid, we want to go out and have fun, but we can’t if we don’t know what is due; it’s too easy to overspend.”

Business management Professor Mahmud Yusuf teaches BUSI 1307, Personal Finance, at this college.

He said if students lack financial discipline, they can get trapped in a debt spiral filled with payday loans and monetary obligations that surpass what they earn.

“Students let themselves get dragged into debt by spending more than they earn,” he said. “That is why there are payday loan sharks out there that will skin you.”

“If you live in this country, you have to have total control on the money being made and spent,” he said.

He said, for example, if a student makes $10 but spends $12, the $2 must come from somewhere.

“We set up ourselves for failure,” Yusuf said. “A definite few will crawl through the cracks and make it, but most will get sucked into an endless debt cycle.”

Yusuf said a person’s budget should mirror their life situation and personal values.

He said it is important to create realistic goals and state them in measureable terms.

“Instead of saying, ‘I want to go to Paris someday,’” he said, “say, ‘If I’m making $500, I’m going to save $200 per month to travel.’”

He said building a budget is important but should be attuned to the individual’s preferences, earnings and savings goals, not to compete with friends’ or coworkers’ expensive lifestyles.

Peer pressure at any level is stressful, Yusuf said. But students do not have to play that game.

“Give up friendships that push for you to ‘keep up with the Joneses,’” he said.

Calvert said everyone is influenced by what others are doing, and it is tempting to go out drinking every weekend. However, students should decide what events they will attend and how much they are able to spend before committing to a weekend of splurging.

“Maintaining a budget is key to fiscal responsibility,” she said. “When you get older, you do not want to live solely on Social Security.”

Calvert said, laughing, “I told my son once when he was little, ‘Money doesn’t grow on trees,’ and he replied, ‘Well, Mom, then why do banks have branches?’”

Calvert said there is a budget program available online, www.mint.com, that helps students monitor spending and organize bills by their due date.

She said there are also downloadable apps for smartphones that can help students monitor spending habits.

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