Two important strategies for dealing with quarterly or annual lump-sum payments:
You must work within limited financial resources. Therefore, as soon as you know the dollar amount of your resources for an academic year, take time to plan your annual budget. This will be crucial to your financial health.
A positive attitude will help make budgeting less painful. Try to view the budget as a challenge that will help you meet all obligations with all available resources.
Before you attempt the actual mechanics of budgeting, analyze your cash flow situation. Is your income on a quarterly or yearly basis or is money coming into your household weekly or monthly? You must know what your expenses are and how often they occur. Each budget is unique and must consider individual needs, values, wants and goals.
BECOMING FAMILIAR WITH THE MECHANICS OF A BUDGET
Next comes the actual mechanics of budgeting. To insure success, keep your budget as simple as possible. The easier a budget is to handle, the more apt you will be to stick to it. To develop a budget:
Savings should not be considered just an option if there is any left-over money, but should be a planned expense and treated just like any other monthly bill. If you find saving money is impossible as a student, be aware of this very important aspect of the budgeting process and practice it as soon as you begin receiving a regular salary.
Sylvia Porter, a well-known financial advisor, mentions three expense categories people usually forget when planning a budget. These categories can lead to the collapse of your financial plan. Ignore them at your peril.
NIBBLERS - little things you take for granted that eat away at your money (laundry, haircuts, snacks, newspapers).
BOUNCERS - expenses that occur once or twice a year and are easy to overlook (insurance premiums, federal, state and local taxes, personal property taxes).
SLUGGERS - emergency unplanned expenses that are disastrous if you have no savings account to fall back on (medical expenses, appliance replacement, car repairs).