Melaney Mitchell (Painting ’13) Budgeting 101: The Key to Survival and Independence

While I was in school at KCAI, money was tight even though I had the feeling of a cushion from student loans. I didn’t have a car, and I worked a part-time to keep a steady balance of my money. I knew that when I graduated, I wasn’t going to have the support of loans or my parents. When I decided to stay in Kansas City, I realized I needed to save money in order to buy a car. I graduated only six months ago, I bought a great used car, pay my bills, and have found a way to still save money. 

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Unless this is you at the end of every month, listen up!

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The key here, is budgeting. When I was a freshman, I got a job at a retail store. The discount, mixed with what felt like extra money made me want all of these things I knew I couldn’t afford. I didn’t realize at the time that I was essentially burning money at my job, going out to eat food after the cafeteria closed, and not being frugal enough with art supplies.

The shock came the summer after when I needed to find an apartment. I had to figure out what kind of loan I needed for the next year and how I would afford things like food and electric bills. Luckily, my own mom supported herself while in college and taught me this budgeting technique that I am about to show you.

Budgeting seems frustrating, confusing, and annoying. It’s simple math.

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 First, figure out a program that works for you. I really loved using excel so I created a spreadsheet to track my budget. I have taught this method to friends who hate that program and opted for a paper version. Now I use a smartphone app called Mint. Luckily, you don’t have to have an expensive smartphone to use the App. Mint also works as a web app with a computer and Internet connection.  Its convenient and easy because it sorts (95% of the time) your purchases into budget categories, and if you have it on your phone it will send you an email if you have spent more than usual or if you are over budget. Check it out here: https://www.mint.com/

Next, determine your essentials. I am going to go over a sample budget for an imaginary person that I based on an average of myself and people who I have helped with budgeting in the past. This really is on the low-end, and these budgets don’t take into account student loan payments that occur after graduation. That is a whole different can of worms that anyone in the financial aid office will help you smooth over. Once you have this down, loan payments are easy. Really.

Income:  $499.80

How to Estimate this!
(20 hours/week @ 7.35 hour = $147
-Multiply that x 4 = $588
-Take home pay will be approximately 85% of this so multiply x.85 and = 499.80

“Loan” or support Income:  $563.20 (Estimating the amount you need monthly from your student loan/parents/mystery fund in the Cayman Islands is as simple as subtracting the essentials, and a few extras listed below. Your parents, the business office, and financial aid will thank you if you’re prepared for this.)

SIDE NOTE: Planning in this way, and having a part time job will allow for you to plan your loan over an entire year. From mid-September to mid-September. That way you don’t have to worry when that overage check is late, you already planned for that to happen and groceries are still in your fridge!

Essentials:
These are all “averages” from my own personal experience and what I have seen when I helped friends budget. You can choose to be much more frugal. However this budget its pretty realistic for your future going forward.

Rent: $700 split = $350
Gas: $35 + use = $50  split = $25
Electric: $9 + use = $50  split = $25

Water/Trash: N/A
Most KC apartments don’t have this charge, but it can be up to $50 if you’re paying by the gallon plus trash cost.

Phone: $60
Most people have data plans on their phones and that is expensive. Even more if you go over your plan’s limited usage. Phone bills range from cheap $40 to expensive $140 based on how many things you have, and what you use. Your phone makes a pretty big difference too if you are on a payment plan. $60 is a low average from what I have seen.  If you have a smartphone, you will be paying about 70. Also, often family plans are cheaper and you can be on a plan with your parents that will save money.

Internet: $40 split =$20
This is for 15 mbps.  Which is quite a lot, it’s the mid-priced package, which means you could get more or less. You really don’t need your Internet to go faster than this while in school. If you are a gamer, any Internet that costs over $40 a month should come out of your pocket as a non-essential. Don’t make your roommate pay for gigabit Internet if they just use it to write papers and check Facebook.

Renters Insurance: $12 split= $6
Seriously get this. Your laptop was $1,500. It’s 6 dollars a month; a lot of places have plans to cover your studio space too for when someone leaves the door propped open and your laptop disappears. Get this, and if you live in a basement, add flood insurance.

Groceries: $250
First, don’t try to split this with a roommate who does not budget. Splitting food with a roommate usually leads to bad things in general. Secondly this is estimating price per meal (250 dollars/ 30 days/ 3 meals= $2.78 per meal. Consider that when shopping!) You cannot afford to eat meat every day on this and you definitely can’t afford to shop at Whole Foods! Buying a slow cooker at a thrift store and making/freezing large portions of cheap meals will save you so much money. You can also be much more frugal than this!  I have seen it work! Just remember, the worse foods you eat, the more likely you are to get sick and be tired.

This book totally saved me. All the recipes cost around $15 and it would cook in my crock pot while I wrote papers or went to studio.

Also, if you don’t have a car Door to Door Organics actually saves time and money. Plus you end up eating a whole lot of green things like kale that give you energy on little sleep. If you get a few friends to do it with you it saves even more.

Pharmacy: $25
You don’t think so? Oh no you have carpal tunnel from your drawing and need a brace or got sick from staying awake more than 24 hours. Having money set aside for this helps you get better – and back to work – faster

Household Supplies: $50
Shampoo, dish soap, paper towels, etc. Target’s off brand “up and up” is really fantastic, and cheap for everything from toilet paper to Swiffer mop covers. You need this money to either keep your apartment clean or pay for the traps you need to get rid of critters. Let’s just imagine it’s a budget for cleaning supplies.

Laundry: $12
I usually spend $10 on laundry every month; I had internships in professional environments so I had studio clothes, and business casual clothes. This covered about 3 loads. The extra two dollars is for that annoying towel or two that refuses to dry or when the washer at the Laundromat does something weird.

Essentials Total =  $813

Non-Essentials:

Coffee/Other Habit: $30
This allows you to get nice/ fancy coffee about 8 times a month. If you drink Americanos or something along that line, you can push 15. Maybe. Also if you really want to be financially sound when you graduate, don’t start smoking cigarettes. If you ever want to live in a larger city you will be in a huge financial bind being dependent on something that pretty much triples in cost.  In Chicago they average at $9 a pack, which is more than 1 hour at the minimum wage there.

Restaurants/Bars: $30
This is a treat if you can personally justify affording it. Trust me, when you graduate, you really can’t afford to eat at Cheesecake Factory and drink a $20 bottle of something every weekend. That would cost you $250 a month on the low end.

Fast Food:  $20
At lunch in studio, everyone you know is ordering Jimmy Johns or going to Kin Lin, or they are going to sonic at 1am because you’re all hungry. This amount only allows you to go a few times. So choose wisely.

Shopping: $30
In college, never buy full price clothing, and seriously don’t spend more than this on clothes. I worked in a retail store for 4 years watching people blow their paychecks on stuff. It really does not matter. Once you have the things you NEED, just stop.

Netflix/Spotify/Other Subscription: $10
This is self-explanatory. I’m really extroverted and I was always one of the few people in studio at night this made me feel crazy. Watching marathons of the office while I worked on drawings was well worth the $7.99.

Non Essentials Total= $120

Look at your personal bank statement and see where your money went the last couple of years. If you spend around $60 on fast food every month and never buy coffee, that’s what works for you. Adjust this as needed.  I try to say keep non-essentials around $100. If you can’t do that right away, there is no reason it should ever go over $200. But know, when you graduate that $100 is a lot of money for non-essentials!

Car (optional)

Basic Insurance: $40
Gas: $50
Oh sh*t I have a flat tire: $100

Not saving or planning for moments when something goes wrong with your vehicle only puts you in a dangerous situation. If you have a newer car, and this money goes unused, DON’T TOUCH IT. Building a safety net is an important part of being independent. If your car ever gets towed, it will cost you about $150 for the fee and an additional 30-50 dollars per day it is at the Tow lot.

Car Total= $190

 Of course, you’ll need to adjust this depending on the type of insurance you have, how much you drive, etc. Larger and older cars just use more gas, but how much are you actually driving?

Total Budget Without a Car = $933

Total Budget With a Car= $1,123

Total Budget Without a Car – Income = $933 – 499.80 =433.2

Total Budget With a Car – Income = $1,123– 499.80 = 623.2

The amount after you subtract income is what you will need each month before considering supply and book costs per semester.

When it comes to that, consider your department, do pre-paid fees cover a large portion of the cost, is your particular practice really costly? Think realistically about both of those things. You are attending art school to develop the discipline to have a studio practice after you graduate. If your practice is costing you $2,000 per semester in supplies alone, where will the money to make art come from when you graduate? Is money your medium? When you are taking out loans or your parents are paying your educational cost, it seems like justifying that “makes sense”. What happens when you want to live as an adult when you graduate? What happens when you decide the art community you want is in a city where rent costs as much as your art supplies once did?

This is where the safety net comes in. I used my safety net to buy a flat file and a car when I graduated. I budgeted for each month, planning how much I would make, and how much I might spend. Slowly, I started accumulating extra money by working more hours and saving whenever I could. It took discipline and control to ignore that extra money. If you know you’ll spend that money, work out something with your parents to have the overages for your loans to go to them and you only get exactly what you budget for needing that month. Eventually, the extra money you have becomes the most essential thing to keep things balanced.

Outside the safety net, grants and residencies are there to help you afford to make work and focus. Most of these applications require a thorough, in-depth budget. Without being able to plan where the money they give you is going, how can they trust you with it?

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So now, what do you do once you have graduated? Where is almost $1,100 going to come from without any loans or some financial help? Its more simple than it seems. Whatever you do DON’T GET A CREDIT CARD UNTIL YOU KNOW HOW TO BUDGET COMFORTABLY. Use it for stuff only within your budget and pay it off in full every single time. More than likely you have student loan debt. Don’t get into credit card debt its way worse.

Getting a job while you are in school- or at least during the summer- really shouldn’t be optional.  It teaches you how to manage time, you’ll learn a lot about how the company functions, and you’ll make money to have less loan debt. When you graduate, it is really hard to find a decent part-time job in May. Typically stores and restaurants start hiring in March for the summer, and when you are new, good luck getting more than 10 hours a week for about the first month.

If you are lucky, you can work somewhere that they pay above minimum for an average of 20 hours a week. Even at $9 an hour, that’s still only $612 a month. The other money would need to come from selling your work (it really is possible!) or a second job paying about the same or a bit less. Without a car, that one job can stretch to a few more hours and your goals can be met. Cars are giant metal money pits unless they are newer, so be wary of that. Most of my friends who have spent less than $2,000 on a car put about $1,000 worth of repairs/maintenance work into them each year. That is a ton of money when you aren’t making a lot.

Be open to moving beyond retail. I have an awesome freelance job that I found online that balances out a part-time teaching job I was able to get through an internship. Those two separate things balance, I can do more freelance when its winter and I don’t have classes, but do less when it’s the beginning of fall and I am planning my lessons. Two retail jobs usually will lead to a ton of hours during the holidays and then little to none in the spring. January and February are cold and work is scarce. Back to that safety net again!

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            To conclude, a recap

  1. Pick Your Method: Mint.com, paper, spreadsheet, etc.
  2. Define your Income: use this to determine what you would need from a second job or loans
  3. Define your Essentials: What things do you need to have to survive?
  4. Define your Non-Essentials: What do you spend money on?
  5. Find the difference between Income and the total of your Essentials and Non-Essentials. Determine where you can make changes.
  6. Plan for the future. Start saving to build a safety net.
  7. STICK TO YOUR BUDGET: don’t let a new pair of jeans burn an imaginary hole in your pocket. They seriously don’t matter. I worked in retail were supposed to tell you they do, but they don’t. Focus on school and saving money, you’ll put yourself in a better position and thank yourself later.

Best of luck starting budgeting! You’ll feel like an accountant in no time.

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