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How to Set Your First Budget

April 10th, 2008 admin

budget.jpg

Ah, budgeting-possibly one of the least exciting things about moving off to college-but usually one of the most necessary!

It’s completely normal to feel confused or even frustrated by the idea of having to juggle all the bills that Mom or Dad once handled themselves. The easiest way to tackle them all at once, and make sure you have some change at the end of the month, is to start a budget.

Where to Start

The easiest way to make a budget that works is to save all your receipts, pay stubs, and bills-all of them!-for a month. At the end of the month, tally up your costs and your income. If your income is less than your expenses, you either need to increase your income (by getting a job, for example), decrease your expenses (check out these 50 ways to save $$ in college), or both!

Planning Ahead

Once you’ve seen what you earn and spend, you can set up a “Planned Budget” for next month. Estimate your income and expenses, and write them down. Use this free budget worksheet from Fox College Funding to get started-it’s straightforward and might remind you of some expenses you’d forgotten about!

So, you’ve made your “Planned Budget,” now what?

You guessed it. Save your receipts, bills, and pay stubs… AGAIN. At the end of the month, enter everything into your budget worksheet, and see how close your actual income and spending came to your estimates. Decide how you want to change your budget plan for next month to fit better with your priorities.

Making it Work

So… You’ve planned out your budget-and you really, really tried to stick to it-but somehow you spent a lot more this month than you thought you did. It’s tempting to think the only solution is to make more money (good luck figuring a second job between your first one, friends, studies, and classes) but the best solution? You need to control your spending.

How???

I’m a big fan of the envelope system-you budget out a certain amount of cash per week for things like groceries, clothes, etc. and literally put them in separate envelopes. Then when the cash is gone, you’re DONE spending for that week.

Don’t want to have cash lying around in envelopes? Here are some other ways you might be able to make a version of the envelope system work for you:

  • Keep your weekly budget of cash in your wallet, but clip money together in separate paper clips labeled with what that cash is earmarked for.
  • Buy gift cards to places you frequent (Starbucks) and use them to set your budget for the week/month. You could also buy prepaid credit cards or a Visa gift card for items like groceries or clothes-just write the use & balance on the back with a permanent marker.
  • Give yourself an “allowance” in cash for entertainment or other socializing so you don’t overspend when you go out with friends.
  • If you find yourself swiping your credit or debit cards too often, hide them so you can only use them for emergencies!

Remember, the goal of a strong budget is to make sure you have more money coming in than you do going out!

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Entry Filed under: budget & finances,paying for college

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12 Comments Add your own

  • 1. Robert Kirkpatrick  |  April 12th, 2008 at 4:43 am

    Instead of getting a “summer job”, start a buisness that will pay you residual income while you are in school.

  • 2. Elliot Hanson  |  April 27th, 2008 at 4:42 pm

    Good post. Budgeting is an essential skill for college students (and everyone else too).

  • 3. Jamie  |  April 29th, 2008 at 9:47 am

    @Robert: That’s a great idea if you can implement it. Do you have any suggestions for what students could do?

    @Elliot: Thank you. I completely agree. I’m so glad I learned to budget when I was younger–it made the transition to paying my own bills so much less painful.

  • 4. Surviving College Life &r&hellip  |  August 13th, 2008 at 9:16 am

    […] How to Set Your First Budget @ Surviving College Life […]

  • 5. Pay for College Blog &raq&hellip  |  January 21st, 2009 at 6:39 pm

    […] card offers and students balancing their own individual budgets. (Your student can learn more about how to set a budget at our sister site, Surviving College […]

  • 6. Pay for College Blog &raq&hellip  |  January 21st, 2009 at 6:39 pm

    […] card offers and students balancing their own individual budgets. (Your student can learn more about how to set a budget at our sister site, Surviving College […]

  • 7. Pay for College Blog - Ti&hellip  |  January 21st, 2009 at 6:40 pm

    […] card offers and students balancing their own individual budgets. (Your student can learn more about how to set a budget at our sister site, Surviving College […]

  • 8. MTV Takes a Stand on Stud&hellip  |  February 3rd, 2009 at 12:07 pm

    […] card offers and students balancing their own individual budgets. (Your student can learn more about how to set a budget at our sister site, Surviving College […]

  • 9. Surviving College Life &r&hellip  |  August 26th, 2010 at 12:10 pm

    […] How to Set Your First Budget – Budgeting basics for the newest budgeting newbie, complete with a freebie budget worksheet […]

  • 10. Surviving College Life &r&hellip  |  September 9th, 2010 at 12:03 pm

    […] How to Set Your First Budget […]

  • 11. Katie  |  February 17th, 2011 at 12:31 am

    I use mint.com to help me budget. I put in my bank account and credit card information and I set up my budgets on the website and it keeps track of it for me. But this only really works good if you use a debit or credit card for everything since it can’t keep up with cash.

  • 12. Marlee  |  April 21st, 2011 at 1:05 am

    Great post!

    I’m a graduate student who found out how much more expensive school is without access to grants. I’m making some serious cuts to my budget while documenting the pain at:

    http://www.marleeindebt.blogspot.com

    Thanks for your tips, I’m sure I’ll be using some of them!

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