For Working Class Empowerment

If you’re typical of the Working Class college students I have known (and been) then you’re probably in a near constant state of anxiety. If not over that midterm exam you’re woefully ill-prepared for, then over money. I will address exam anxiety in another article. For now, let’s consider the cold, brutal and painfully boring realities of college money management. I’ll try to make it less boring by considering a fictional college student named Jenny. 

Jenny is 22, lives with roommates (who never do their share of household chores, by the way); works 20 hours a week making minimum wage plus tips as a store clerk; she attend community college, but she eventually wants to be an Anthropologist. To get by she also relies on student financial aid. Each term, after tuition is paid, her excess financial aid arrives in one lump sum. But no matter how hard she tries to stretch out that money, three weeks before the end of the term she is calling dad for a loan because she can’t quite pay her share of the utility bills and her roommates are being jerks about it. What can Jenny do?

It’s pretty simple, really. Jenny needs to budget. She may find this suggestion distasteful: after all, she’s an Anthropology student and not some horrid, uptight, money-obsessed “business” student. But if Jenny wants to actually succeed in school she needs to remove the major stressor that is (whether she realizes it or not) distracting her from her studies. Also, it sucks to have the roommates be jerks and to feel ashamed or frustrated at being unable to pay your bills. So, budget it must be, Jenny dear. 

I will not offer an item-by-item or step-by-step breakdown of creating a budget. Jenny (and you) can find budgeting tools and templates all over the interwebs once you’re ready. Instead, I’m going to focus on key steps which will better enable both you and Jenny to actually create a budget that works. Creating a budget is the easy part. It’s what comes before the budget which makes all the difference. So, Behold! The steps:   

One - Destroy Your Credit Cards.

Show them no mercy. They are your enemy. If you don’t destroy them, they will destroy you. If anyone tells you otherwise, they are liars and probably work for an evil bank. 

Two - Track Your Spending: 

Jenny should spend a month tracking her spending. If she only or primarily uses a debt card, she can skip this step and simply download her bank statement for the previous month. If she often or usually spends cash, then she should not skip this step and should either start using her debt card exclusively for 30 days (recommended) or carry a little notebook with her and record every purchase she makes with cash. This month of tracking provides a baseline for analysis. This is a fancy way of saying a “clear picture,” and it’s indispensable if Jenny wants to create a budget that works and stop searching the sofa for loose change. 

Three - Review and Get Rational:

Jenny should carefully review her spending habits and ask hard questions about what are needs and what are wants. Most of us in America don’t know the difference anymore because advertisers are brilliant at making us want things and then convincing us that our life is miserable and incomplete without those things. In other words, they turn our Wants into a fake Needs. Jenny is is no exception. So she needs to be objective and rational to cut through her programing and becoming clear on the difference. Jenny Needs a roof over her head, electricity, food, water, etc. She does not Need two $5 iced mochas five days a week. I’m not asking Jenny to cut out those iced mochas or any other Want at this point. This step is only about helping Jenny eventually figure out her priorities, which we’ll get to. For now, she she must simply to go down her list of expenditures for a month and write W or N next to each item. If Jenny scratches her head about some items, that means they get a W. Needs aren’t negotiable, Wants are. Simple as that. So if Jenny can live without it, it’s probably not a Need.

Four - Tally Up Your Needs:

Do you really need me to explain that, Jenny? Simply add up the total amount you spend a month on Needs. It’s not necessary to tally up each Need individually either, such as multiple expenditures on groceries or toilet paper. 

Five - Tally Up Your Wants:

This works a bit differently than the Needs tally: Jenny must tally each Want individually. Then she goes a step further by taking each of those Want items and  multiplying the total my 12. For example:

As I mentioned, Jenny buys two iced mochas a day, five days a week, at $5 (counting tip). That’s $10 a day. $50 a week. $200 a month. $2400 a year. What the hell, Jenny? That’s a fricking lot of money to spend on iced mochas! Stop crying already. I’m not judging you, I was just pointing out a fact. A fact that will help you with step ... 

Six - Prioritize Your Wants:

Now that Jenny has tallied all her Wants for the year, she can examine them from the enlightened perspective of their real costs and rank them according to priority. Any ranking system will do but I recommend a 1-5 scale, with 1 as “Could Easily Live Without” and 5 as “Life Sucks Without It.” There’s no hard rule for any part of this step. What’s important is that Jenny is honest with herself and her own particular tastes and emotional needs relative to the cost. 

So, for example, “Life Sucks” for Jenny without her iced mochas even if they do cost $2400 a year. But, if she’s honest, she “Could Easily Live Without” Netflix.  

Seven - Eliminate or Reduce Wants

This is the big step.

Now Jenny has a much clearer picture than where she began of her relationship to spending and her own psychology. And when it comes to being broke, and learning how to not be broke, becoming self-aware is half the battle. The next half is to actually tackle those excessive wants in a way that recognizes you are a human being and not a soulless money-sucking bank. Wants are important.They are part of being human. But so is being rational (hopefully). To be rational all Jenny has to do is look at the lowest-priority Wants from her list and eliminate them. That’s right. Eliminate. Strikethrough.Terminate. Destroy. Does that mean Jenny may never satisfy any of these “Could Easily Live Without” Wants again? No. It simply means that Jenny loves her “Life Would Suck Without” Wants so much, that she’s willing to sacrifice these lesser, petty, insignificant Wants for them. She’s too good for petty Wants anyway. 

After eliminating all “Could Easily Live Without” Wants, Jenny must then go up her list and see if there are any 2s, 3s or maybe even 4’s she is willing to eliminate entirely. She must be careful here, since she may now be feeling inspired and motivated to eliminate nearly everything. That would be a mistake, since feelings of being deprived will kick in once she tries to put her plan into action. Self-punishment does not work as a motivational strategy. With that in mind, for each item she is unwilling to eliminate, she should still ask herself: “Can I at least cut it in half? A third?” If she can, then she can simply put a line through the monthly amount and next to it write the new amount she will spend. $100 a month on fast food, rated 3 on the Want scale? Bam! $100 / $50. This change just saved Jenny $600 a year while not forcing her to be a miserable self-denying hermit who can never enjoy a delicious hamburger. 

This last tactic can sometimes work on “Life Would Suck Without” Wants too. For example, if Jenny simply reduced her iced mocha consumption to only one a day she would save yet another $600 a year, while still keeping her happy and a pleasure to be around rather than a raging banshee going through caffeine withdraw.

Eight - Create A Budget

Now that Jenny has a new target for spending on Needs and Wants, she’s ready to create a new budget. To do this she finds one of those budgeting spreadsheets from the interwebs that I mentioned. When creating a budget, no matter how tight the bills or debts, I tell you and Jenny the same thing: always, always, always “pay yourself first” by way of savings. This is a rule. If you violate it, I will no longer love you and whoever Jenny is I will never speak to her again. With that said, simply create a budget thus:

  1. Add Net monthly income + Financial Aid (divided into months)
  2. Multiple Net income by at least 5% but ideally 10%. Put that amount in a savings account (I recommend an online savings account like because you can’t access it with a debit card. Out of sight, out of mind, but there for emergencies. 
  3. From the new total subtract your Needs.
  4. Subtract your Wants.

 Wala! Jenny should have money left over. If not, she needs to go back to Step 6 and be more rational and honest about your Wants. This might even be the time to reexamine her Needs as well. Did she include her Smartphone as a Need? Guess what, Jenny, a Smartphone isn’t a need and even as a Want, is it really that important to have portable internet service 24/7 when you have a laptop at home? Maybe switch to a text and calls only plan. Or, your car. Big American mistake, Jenny. If you live in a city there’s probably adequate public transportation and eliminating that Want alone could free you to pay all your bills, keep all your other wants and maybe even have three iced mochas a day.  

As you and hopefully Jenny now see, you can be a student with a crap income but live decently and not have to freak out every time the electric bill comes due. The key is rationality and self-awareness. I trust you are both and if you’re not, you can be with practice.