Financial Education

Budgeting

The following documents are available for download: Spending Diary Spending Diary (48.5 K) Monthly Spending Plan Monthly Spending Plan (36 K) Steps for Goal Budgeting Steps for Goal Budgeting (33.5 K)

How to Create a Budgeting/Spending Plan

1.  Determine the following:

• How much money do you have coming in?   Identify all sources of income, including parents, personal earnings, dividends, interest, etc. 
• Where is your money going?   Keep a spending journal for a week, or even a month, to help you pinpoint just how much money your spending.  Be sure to indicate HOW you are paying for your purchases (i.e., credit card, cash, debit). 
• What are your Needs vs. Wants?   A Need is a necessity.  Think of this as a fixed expense.  An example might be your rent each month.  A Want is something you would like to have, but isn't required.  For example, the latest video game or coffee on your way to class.
• What types and how much debt are you accumulating?   Be aware of how much student loan money you are borrowing and how much debt you are accumulating your credit card(s).

2.  Set goals and prioirties

Everyone is unique and a personal budget should reflect these differences.  Think about what is important to YOU and create a plan to obtain those goals.  Use the following tips:

• Write down each goal.   You will be more likely to hold your self to it!
• Assign a cost to each goal.   Whether it is $1 or $100...write it down.  This is a good place to "overestimate." 
• Set dates.   Give yourself a specific point to work towards.
• Set all types of goals.   Goals come in many shapes and sizes.  There are short-term (less than one year away), recurring (perhaps you want to be able to go out to a fancy diner once every month), or long-term (greater than one year away).

3.  Develop a plan.

You have all the input you need at this point, it is time to create a budget.  This is a good place to ask for help if you haven't done so already.  The Student Wellness Center can provide you with everything from an electronic template of a budget, to a one-on-one counseling session to help you create a budget from scratch.

Don't forget to look ahead while you're working on your budget.  Give yourself an "emergency cushion" for unforseen or one-time expenses (i.e., car maintenance, plane tickets, Christmas gifts, etc.).  A rule of thumb is to make this equal to 6-9 months worth of expenses in order that you do not need to borrow money for such expenses.

4.  Implement your plan.

Try it out for a month and see how it goes.  When working with a budget, it is important to:

• Be flexible.
• Be aware of your actions.
• Stay positive.
• Avoid detours.

Don't give up on your budget the first time you slip up!

5.  Revise your plan.

What is working and what is NOT working?  This may be another time where it might be helpful to meet with a financial counselor in the Student Wellness Center. 

Don't be afraid to make changes and try it again.  Budgets are NEVER perfect and you will learn more every day.

Are you out of money before the end of the 30 days? Do you need help setting a budget? Call Kate Trombitas at 292-4527 for help!