By Norah St. Peter, Campus Branch Manager, University of Maine Memorial Union, Orono
Making a budget is crucial to financial success at all stages of life, and getting comfortable with budgeting early in your college career will help you in the future! Your budget will have two important components: income and expenses. It seems simple enough, but it’s easy to get tripped up when you’re creating your budget if you don’t realize that there are different types of expenses for which you need to be prepared. UCU is here to help you understand the differences!
- Fixed Expenses: These are the expenses that are the same each month like your rent and your car payment. Budgeting for fixed expenses is straightforward because you know exactly what to expect.
- Variable Expenses: Slightly more complicated than fixed expenses, variable expenses like groceries and gas are items that you know you’re going to need to include in your budget each month, but that don’t stay exactly the same. To factor these expenses into your budget, take a look at your bank statements from the previous month (if you bank with UCU you can find these on your Personal Finance Manager) to get a ballpark figure, and always make sure to budget high just in case!
- Periodic Expenses: This is the category for expenses that come regularly but not monthly. Periodic expenses include things like car registrations and holiday gifts. Figure out how much you’re going to need to spend on each periodic expense that you identify, divide that number by the number of months you have to save for the item, and then you’ve turned that periodic expense into a fixed amount to put away each month. UCU offers club accounts designed to help you put aside money for specific things, and they come in very handy when you’re saving up for periodic expenses!
If you want to know more about the different types of expenses or get some help with starting your budget, reach out to UCU!