A budget is a plan to keep track of earnings and expenses. It is a financial plan used to predict and allocate money earned and spent each month. It can represent both goals, and limitations, depending on a person’s financial needs. Using a budget can help students visualize and understand exactly how much money they will have every month from all sources, as well as what expenses they need to prepare for.
Fixed expenses are expenses that stay the same from month to month, such as rent payments.
Flexible expenses are expenses that change from month to month, such as how much you spend on utilities.
Saving expenses are the money you set aside each month as a part of a saving plan
Total expenses are the combined amount of your fixed and flexible expenses.
Total monthly income is the income from your job or other resources including investment dividends, pensions, Social Security benefits, rental income and more.
Disposable income is the money you have left over after you subtract your income taxes from your income.
Some general advice when creating your budget:
|Car (Insurance, Gas)
|(budgeted - actual = difference)
Envelope system: With this method, you create an envelope for each of your budget categories and fill it will the cash. You only put the amount of cash you wish to spend on that category. Once you are out of cash, you can no longer spend in that category. You can use digital envelopes for your fixed expenses if need be.
Reward yourself for success: While budgeting can be daunting, it helps if you can find ways to motivate yourself. Build reward systems into your monthly budget. If you stick to your budget for three months, budget a special reward. Making budgeting into a game where you’re rewarded for good financial behavior—is a fun way to get back to the basics of budgeting.
Go to university events
Research textbook prices
Apply for every scholarship you see
Stick a percentage of your paycheck directly into savings
Watch how much you are spending on food
Ask for student discounts
Choose your housing wisely
Take advantage of college amenities