How to save money on a budget

Spinnaker

It all started with one simple idea–what if I could go on a vacation with my own savings?

Then I found a reason to do it when my favorite play moved to Broadway in New York City. After five months of saving, this broke college student is staying in one of the most expensive cities in the world for four nights and five days.

Let me tell you how I did it.

1.) Calculation

It all starts with the awareness of your income. These are the things you need to do to gain that awareness.

A.) Calculating what you need

Just pretend you have all the money in the world and make an itinerary on one of the many travel Web sites available. Pick the cheapest hotels and flights you’re willing to tolerate and manually account for things like spending money and entry fees to the places you’ll visit. It’s more difficult than it sounds in the manner of choosing what you’re willing and not willing to sacrifice but as far as actually doing the calculations, it’s definitely a lot easier than actually saving the money.

B.) Calculating what you have

Pull out your pay stubs. Find a monthly average. Think of every necessary expense–gas, groceries, school supplies, etc. Find that monthly average. Take your monthly average pay and subtract your monthly average expenses. This is the amount you can afford to save a month with your current income.

“Wow,” you’re saying. “I didn’t know I could save that much.” Well, you can only save that much if you never go out to eat, buy clothes, video games or anything else you want. Never make a budget so strict that you stop getting all your wants altogether; it’s not reasonable. 

So, what you have to do is figure out a good amount to set aside for current spending–something that’s flexible but still forces you to make sacrifices. Minus this number from your original savings number and this is the final number that you can realistically save.

C.) Calculating how long you have to save

Compare your final monthly savings to the monetary needs of your itinerary by calculating how many months you have to save before you have enough to take your trip.

Don’t like the number you see, do you? No duh; you’re a college student with not a lot to save. This is when you figure out what additional things you can do to make more money and therefore increase your chances of taking a vacation sooner.

2.) Thinking Inside the Box

Start asking yourself some very important questions about your time and how you’re willing to spend it. Do you have time for a second job? Do you have the time to search for a better job? Are you willing to quit your current part-time position to take up a full-time position?

During the summer, I had plenty of time and not much to do when I decided to start saving for my trip. My part-time job only scheduled me for about five hours a week, so I found a temporary nine to five, full-time position and changed my availability at the part-time job to weekends.

Other people my age were spending their summer being lazy in the sun while I sat for eight hours a day in an office with no windows. It wasn’t fun and that will be the first thing you learn while working additional hours. Through it all, you must have your mind set on the future. By spending my time working, I was able to get a huge leg up monetarily. If your schedule allows, find extra work. There are plenty of agencies that hire students.

3.) Thinking Outside the Box

You might not have time for an extra job. Maybe you already have a full-time job that just barely covers your expenses as it is. There are plenty of additional, more creative ways to make extra money.

First, look around your room. What do you have but don’t use anymore? Yes, even that Xbox you haven’t played in a year counts in this answer. You’d be surprised what’s worth money online. An old perfume bottle could be out of stock in stores and sells for double the price you paid for it. You never know until you check.

Other things you don’t have yet could sell for quite a profit as well. Simply scavenging thrift stores for things that look valuable can be of use to you. For example, a pair of name brand jeans can go for $20 or more-plus $10 shipping-online, while Goodwill charges only $5 for any pair of their jeans. That’s $20-$25 in profit on just one pair of jeans.

Creative profit possibilities like this are endless and can be done in your spare time. Just don’t make a haste decision when purchasing something to resell; there’s never a guarantee.

4.) Stay on track

It took five months of hard work to get where I am now. During that five months, I doubted whether I could continue to save and even whether it was worth it as I turned down invitations to go out to eat with friends and scanned files in a cramped office.

It won’t be easy, but if you keep your goal in mind and remember what you’re saving for, everything will be more than fine in the end.