Starting to budget while in college can result in learning how to manage money and plan for the future. Here are 4 simple tips to creating and maintaining an effective budget:
- Track spending. Record every penny you spend for at least a month before creating a budget. Be honest about where you are spending your money, and keep a spending log.
- Identify Income and Expenses. Use a budgeting worksheet to document your income, then expenses. Income sources would include student loans, job earnings, gifts, and more. Expenses should come directly from your spending log, and broken into categories like housing, food, entertaining, etc.
- Do the Math. Calculate income minus expenses. If you have money left over, consider adding to your savings account or an emergency fund. If you calculate a shortage, start identifying categories where you can cut back. This is a good time to question your needs versus wants.
- Reexamine and Adjust. Income and expenses change over time. Maybe you received an additional scholarship, or your landlord raised the rent. When changes occur, it’s time to reexamine and adjust your budget to stay on track.