Using a BudgetThe Smart Student's Guide to Starting a Budget

Financial Wellness

Get Organized With a Budget

To take control of your money and your financial life, you have to get organized. And the most effective tool for this is a budget. When you create a personal budget, you organize your use of money into spending categories and then set your financial priorities. Your budget will help you pace your spending and stay on track to reach financial goals that are important to you.

Creating a workable budget while in college can help you:

• Meet personal goals such as studying abroad or buying a car or a new computer
• Become better prepared for emergencies
• Stay out of debt
• Keep accurate and up-to-date records
• Start thinking about longer-term financial planning

Creating a Budget

1. Create a spending plan.Think of a spending plan as a map. Where do you want your money to take you? A spending plan can help get you there. Follow these steps:
2. Pay major bills first.Set aside money for your tuition, books, student fees, meal tickets, and other large annual or semiannual costs. Once these amounts are subtracted from your bank balance, you'll have a more accurate starting point from which to plan your budget for the rest of the semester
3. Track your spending.To become aware of exactly how you’re currently spending your money, make note of every single penny that you spend over the next month. You can use a paper notebook, a spreadsheet app, a notepad in your phone, or whatever system works best for you. 
   
   

Here is a link to an Excel spreadsheet for you to use to track your spending. The Excel link will allow you to download a copy of the budgeting sheet to use to track your spending and income.

Adjusting a Budget

As your money situation changes throughout the semester or school year, you will want to adjust your budget.

Income increase. Did you take on a part-time job or gain a reliable new income through other sources? Make the most of your new income by paying down credit card debt or adding money to a savings account. If you don’t have a savings account, now is a great time to open one. Visit Banking Your Money to learn more.

Income decrease. Losing a job, a scholarship, or other income source forces you to tighten your spending. These steps can help you adjust your budget without cutting out entire spending categories:

• List the areas in your monthly spending plan that are not essential to your living situation, such as snacks, entertainment, and new clothing.
• Figure out how much money you need to decrease from your monthly expenses.
• Divide the amount of your monthly income reduction by the number of spending categories you selected for cutting back expenses.

For example: Let’s say you choose three different spending categories for trimming expenses. If your monthly income reduction is $150, you would divide that amount by three, for a spending-reduction target of $50 for each category.
Then, subtract your targeted reduction from the existing “budgeted amount” column in each spending category in your spending plan. That’s the maximum amount you can now spend in each category and stay within your budget.
Ready to start building your personal budget? Try the Budget Wizard. After creating your budget in the Budget Wizard, you can log in to access and edit your budget at any time.

Information provided by CashCourse, www.cashcourse.org

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