Building a Budget
The idea of building a budget may seem overwhelming at first, but it can actually be quite simple. Here are a few steps to get you started on the right track!
- Figure out your monthly income: Most student incomes are a combination of scholarships and financial aid, a part-time (or work study) job, and parental assistance.
- Track your expenses: Keep a record of your expenses for at least a month. Keep track of your spending using a paper tracking method (download a budget template), a computer spreadsheet, or a mobile budgeting app (see our resources page for app suggestions). Typical expenses are books, transportation, entertainment, personal items, food purchases (outside of your meal plan), etc.
- Compare your expenses to your income: Total your monthly expenses and subtract them from your income. Ideally, your income will be greater than your expenses. If not, you will need to make adjustments.
- Analyze your expenses: Sort your expenses into “need” and “want” categories. (Be honest!) If a “want” item isn't easily covered by your income, consider reducing or eliminating it from your expenses. Use this income spending worksheet to help organize and categorize your spending.
And just that fast, you've created your budget. Now that your budget is in place, you will have better control over your money. Remember: your budget isn't set in stone. It is just a forecast of what will happen. At the end of the month you should review what actually happened. Where did you underestimate or overspend? Use this analysis to make adjustments for the next month.
Now that you've created your budget, stick with it! Spend a few minutes at the end of each day recording your purchases in your budget spreadsheet. Mobile budgeting apps can automate this process to make it even easier for you to track your spending and document your receipts.
- Concerned about overspending on food? Choose the meal plan option that satisfies your nutritional needs and better suits your budget.
- Not on a meal plan? Comparison shop at supermarkets to get the best grocery deals. Also create a shopping list in advance to reduce your tendency to “impulse buy” in the store.
- Invest in a budget-friendly coffeemaker to reduce the amount you spend on that morning trip to the nearest coffee shop.
- Pay cash for small expenses. Give yourself a daily or weekly allotment of cash and use it whenever you can. Cash purchases will help you be more conscious of how much you are spending.