Budgeting for Big Dreams

For many people, money can seem like an endless source of stress and anxiety. As university students, we are all privileged to have access to tertiary education – but, for far too many of us, our financial education is still seriously limited. Growing up, we are taught only to budget for the basics and given vague ideas about saving money – and that’s only if we are lucky enough to know someone who can teach us these things. 

Managing your money effectively will not only make you feel less stressed and more confident in your spending decisions, but it can also be a major step in getting you closer to your dreams. This is true regardless of you wanting to just feel secure in your financial position, to help out at home, or for a plane ticket abroad. We need to empower ourselves with this knowledge: beginning with understanding the importance of setting financial goals, and then how to plan for, maintain, and accomplish them. Finally, we should learn which tools we can use – ones which are both effective and accessible – to help us achieve them.   

For anyone who needs to learn the basics of personal finance management, I highly recommend the book ‘Manage Your Money Like A F*cking Grownup’ by Sam Beckbessinger. Beckbessinger is a South African fintech (financial technology) entrepreneur and writer (as well as a UCT alumna!). She breaks down financial jargon into easy-to-grasp concepts, explaining everything from compound interest to taxes to side-hustles. As a bonus, her easy-going writing style and South African perspective is a joy to read because her book made me realise how refreshing it is to see economic statistics from South Africa and to be given figures in rands rather than dollars. Her website also has some fantastic articles on subjects like investing, discussing money with your family or partner, and comparing bank accounts to choose the right one for you. It’s even kitted out with some very useful downloadable resources, including budgeting and financial planning templates. 

For now, I’m going to share my top four money management tips from her book that I feel are inspiring, helpful, and easy to achieve: 

1. Work out your spending ratio

This means taking real note of what you spend money on every month. You can do this by keeping your receipts or using online banking to review your spending habits. Which categories are using up the most cash, and how can those numbers be reduced? For example, if you’re buying a lot of food on campus, see how much you save by bringing packed lunch instead.

2. Save now, spend later 

Most people save whatever amount they may have left over at the end of the month. However, if you have disposable income after you have paid your bills and budgeted for groceries, consider immediately putting away a significant percentage of that money in a savings account. The amount you can save will depend on your spending ratio, but what’s left after that is your fun cash! This is the money that you can spend guilt-free on whatever makes you happy, knowing that you have already achieved your savings goal for the month.

3. Don’t be afraid to say no

It can sometimes feel as though there is a social expectation to spend money on going out, eating out, and buying things in order to enjoy ourselves. It can be difficult to explain to friends that you just can’t afford to do something, but there’s no shame in it. You are allowed to spend your hard-earned money on the experiences and things that you value. Nobody wants to be left out because of money, though – so if your friends want to do something that you aren’t happy to spend money on, try to offer a cheaper or free alternative, such as going for a picnic instead of having lunch at a restaurant. 

4. Work out your “why”

It is so much easier to stick to your plans and budgets when you have a goal in mind that saving money will help you achieve. This is both your inspiration and your motivation to keep your spending in check, because you have a vision for your future that you can work towards. 

Remember that we all make mistakes and regrettable financial decisions at times. That absolutely does not mean that you can’t pick yourself up and try again. Ultimately, the way you manage your life, including your finances, should be aligned with what you value as an individual, and that is something that you get to decide for yourself.