Johnson talks budgeting plans

April Johnson, associate advising director for the Center for Academic Success and Advisement (CASA), hosted the “How to Manage Your College Budget” webinar at 3:30 p.m. on Wednesday, Sept. 29 through a Zoom video conference.   

In the Webinar, Johnson spoke about the four pillars of personal financial success: purpose, planning, budgeting and action.   

“Living on a budget helps you to be able to do the things you want to do,” Johnson said.  

When defining the first pillar, Johnson emphasized that a student’s purpose should explain the “what” and “when” for their budget plan. She said, when starting, students must ask themselves why they are budgeting and lay out their goals, making sure their target goal is achievable and realistic. Johnson said target goals might change depending on situations that arise. Because of this, it is crucial to set a realistic budget to avoid a premature failure due to excess idealism.    

When discussing the second pillar, Johnson said it is helpful to create a plan that adds details to the overall purpose of the budget. In this way, students must elaborate on their goals and drill into the details of answering the “what,” “when,” and “how” questions, such as “what do you need to reach your goal?” and “how are you going to make it happen?”  

The third pillar, budgeting, is when the planning stage takes motion. When handling this pillar, Johnson said it is helpful to consider sources of income and expenses. Though it can be relatively challenging to stick to a budget, Johnson said students must anchor themselves to their goals by keeping their minds on their purpose for making the budget. She believes this thought process will ultimately help students achieve their target financial goals.    

“For a budget to work for you, you have to work your budget,” Johnson said.  

Johnson also discussed the 50-30-20 rule, which states 50% of income must go to a person’s needs, with 30% to wants and 20% to savings. In consideration of this rule, an individual must determine all sources of income by finding their “net pay,” a term used when describing how much money an individual receives after taxes are deducted.  

Once all the money “in” is calculated, it is time to determine how much money will be going “out.” In this step, Johnson said expenses should be considered to determine the monetary pool left over. Though rent and bills are most commonly associated with expenses, other consistent payments, such as groceries and gas, should also be considered.   

After subtracting total expenses from total income, Johnson began discussing the action pillar, in which individuals track, maintain and improve their budget. She told students the action stage can take many forms: making wise choices, recognizing needs and wants and updating the budget monthly.      

“This takes time, and it will be hard, but the end goal is worth it,” Johnson said.  

Budgeting successfully can take time and effort to get right, but the ultimate goal is personal financial success. For upcoming CASA webinars, students can visit the FMU calendar page or keep an eye out for mass emails containing the Zoom links from Jennifer Kunka, associate provost for advising and professor of English.