MoneyKey’s Key Thinkers Scholarship is designed to reward post-secondary students for their academic achievements. We asked “What does financial responsibility mean to you and what steps should students take to plan their budget?” and received hundreds of submissions. Below is the winning essay from the Summer 2019 Scholarship recipient Angel:
Just like many students, I have things that I “need” and then I have several things that I “want”. The terms “financial responsibility” and “budget” were terms my parents taught me early but the lessons didn’t stick in the early years. I wanted the latest trends in clothes. I wanted the newest technology. I also wanted good food and enjoy a good manicure and pedicure on occasion. With no sense of financial responsibility or use of a budget, these types of money habits led me to a place with no money!
Then my senior year came around and I made the decision to go to college in the fall! My Pinterest page and online shopping lists became full of my “wants”! My spending fantasy soon turned to college cost reality! I began researching the actual costs to attend and reality hit. College is expensive! My annual dorm fee cost $9,230. Textbooks and school supplies cost $1,065. The annual meal plan is $3,966. In all my average annual cost to attend college will be over $31,000!
Due to several things that life has thrown at my family we currently don’t have this amount of money set aside for college. My father was laid off from 3 jobs in a short time period. We’ve had medical emergencies that came up and I have an older sister who is a rising college senior. This perfect storm caused my parents to have to use up their retirement and savings just to keep our household afloat. That is why scholarships like this one are important to me.
I made a commitment not to let these setbacks keep me from pursuing an education so I decided to get to work. These last 8 months I’ve applied for over 45 scholarships, worked and put away money whenever I got it. Now I have currently reduced the cost down to $12,500! I believe me not making any excuses or blaming others in this situation is a form of financial responsibility.
Financial responsibility also means to carefully use your money by beginning with the end in mind. It’s about prioritizing and creating a plan to take care of what is most important. I believe by prioritizing you’re able to enjoy the things that you want without neglecting your needs. My advice to other students about the best time to become financially responsible is to “start early” and now! The best time to start being financially responsible is NOW. The best time to start budgeting is now!
Creating and sticking with a budget is something else that I have discovered as a key to financial responsibility. I like what author and financial expert Dave Ramsey says about budgeting: “A budget is telling your money where to go, so you don’t have to wonder where it went.” A budget is a tool to help you divide your income into needs, wants, savings ahead of time before you actually use the first dollar.
Here’s 6 simple steps students can use when creating their budgets.
Step 1: Take out a piece of paper or use a program like Excel. Choose whichever one is most comfortable for you.
Step 2: Write down the total amount of money you’re getting as income.
Step 3: Write down how much you will give, save and invest. It’s important that we do these things first. Starting this habit early will payoff for us in the long run.
Step 4: Write down all of bills and needs that require your immediate attention.
Step 5: Write down an amount that freely spend on whatever you want. I think this is another important habit to start. With a balanced budget you can spend this money guilt free, knowing all your other responsibilities have already been taken care of.
Step 6: Balance your budget by totaling up all of the expenses from steps 3-5 and subtract it from your income. If there’s any money left then find a place to put the money. The goal is to get this balance to zero. My dad always tells me to give every dollar a mission!
I intend to learn from my experience and to take advantage of the lessons I’ve discovered early about financial responsibility as I further my education in college. My hope is that others can also learn from my experiences as