As a college student living Dallas, Texas, I lived a life of frugality. I worked, ate what little I could afford, and paid my substantial college bills. At the end of the month I was relieved when I managed to break even—not something I always managed to do. This as you can imagine meant that I was unable to build up an emergency fund. The thought ate at me, so I set out to solve my money problems.

Look to the Past and Present

In order to prepare for the future, you need to look to the past and present. You should determine where your money went. Today many banks will keep bank statements online. These statements will keep a tally of all your expenses. If you used a credit card, debit card, or check, it will tell you what percent you used on utilities, miscellaneous items, and rent.

Once you know how you spend your money, you should track your budget as you spend your money each month. When I was in college, I tracked my finances with Excel. Today there are many free online budget trackers that you can use.

Determine if there is Anywhere You Can Save

Once you have created your budget, determine if there is anything you can cut from your monthly finances. Here are a few examples:

  • Switch to non-name brand products.

  • Cut unnecessary entertainment expenditures like cable, movies, and restaurants.

  • Depending on your location, you may be able to cut a car from your finances. Not using the car will save money on gas and insurance. If you do not sell the car, you should make sure that you drive it a short distance every few days to keep it in good shape. Remember to be careful, especially if you are no longer paying insurance.

Ensure That You Have Proper Insurance

If you do plan on driving, you should ensure that you purchase the proper insurance. A friend that I knew in college decided to drive without his Dallas car insurance. While not paying the premium helped him save money short term, he was eventually pulled over the cops for speeding which left him responsible for paying for the tickets. Not something you want to deal with if you are not financially secure. More than that car insurance can help you ensure that an accident does not lead to financial disaster.

If you can’t afford to purchase insurance and build a savings account, you should look into these car insurance discounts: good student, accident free, defensive driving, and usage based insurance discounts.

Seek Other Employment

If you are paid around minimum wage and not provided any benefits, you might want to seek other employment. 3 dollars extra an hour will give you around $450 more a month. $450 a month might allow you to earn enough to begin preparing for financial disaster.

Build Relationships

One of the perks of family and friends is that they can offer emotional, physical, and financial support if disaster strikes. Just remember that you need to earn the right to borrow money. You can do this by being willing to support them when they are in need. You should also ensure that any money that is borrowed is repaid when you promised it would be. The last thing you want to do is take advantage of their willingness to help.

Credit Card

When I was in college, credit cards were my salvation. You are not always aware when financial disaster will strike. Having a credit card will allow you to pay for the unexpected expense. Just remember that the line between credit use and abuse is very small. Make sure that you will be able to pay off the credit card within the next month or two. This will allow keep your interest low.

Add Money to Your Savings Account

If you do manage to save some money on your monthly expenses, you should remember to try to add some money to your savings account. Even $50 dollars a month will create a buffer between you and financial disaster. So get out there and start preparing.