What tips do you have for creating a monthly budget to keep track of expenses in college?
For instance, how would you organize a budget and what information would you include to make sure that you are on track and budgeting income and college expenses effectively? #finance #budgeting #tips
Step 1: Identify the various "categories" you would like to track. Don't overcomplicate it. Categories are important, because they give "insight" on what you spend you hard earned money on. This will inform you later on, when making hard decisions when confronted with your budget constraints. Be sure to identify your "Funding Source" categories (Income), versus your Spending Categories. Be realistic about both your inflow and outflow assumptions.
Step 2: Budget each of your funding categories. These are your financial capacity.
Step 3: Budget each of your spending categories, but be sure to limit the aggregate total so that total spending is <= available funds (Income). Our law makers are very bad at this basic principle, so don't follow their example.
Step 4: Its a good idea to breakout each line item into either monthly or weekly totals. The more frequent you assess yourself , the more likely it is that you will spend less and learn how to prioritize your spending.
Step 5: Start Tracking. Tracking is where the rubber meets the road. Be diligent in tracking all incoming and outgoing funds according to the categories you have established. Don't miss items. Tracking is where many of the "apps" that you can get on your phone are helpful.
Step 6: Monitor your progress and adjust your spending so you do not exceed your limits.
Step 7: Don't beat yourself up. You may find that your initial assumptions were not achievable. So you may need to adjust your budget for New sources of funding, or New sources of costs.
Overtime, sticking to a budget is a good life skill to learn and is likely to lead to making good financial decisions.
Budgeting is hard to start, but easy once you get the hang of it. Before your money even hits your account, sit down and "spend" it - this means planning where every single dollar will go. Make sure to account for food, rent and other expenses, but also for savings and paying off any debt you have. Then, stick to it! Use an app to track it - Mint is a good one, so is Every Dollar, or even a spread sheet on excel! This way you're able to be in control of what you can spend and where. It also means you may have to make some sacrifices. If you are saving up for something, you may want to put more money in savings and say, cancel your cable. Or maybe you will need to make your lunches at home. Having a goal is always a great way to motivate yourself to budget!
Good luck! You got this!
As others have recommended, you can use apps for tracking a lot of your expenses. Personal Capital is one that I use that others have not recommended. For me, it was easier and more accurate to categorize expenses. I would also recommend checking out Zero Based Budget - this really moved the needle for me in terms of creating and sticking to a budget.