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Don't have a budget- you're not alone. Most students don't like to create budgets. Some feel they are too busy or that their finances are too unpredictable. Creating a basic budget can take less than twenty minutes, though, and you can update or expand it whenever necessary. If monthly income and expenses fluctuate, you can start by simply tracking your monthly spending or download a mobile budgeting app for a streamlined approach.
What is a Budget?
A personal budget shows how you spend your money. In its most basic version, it includes three sections: income, expenses, and savings. Income can come from a variety of sources: parental support, gifts, employment, financial aid refunds, etc. Expenses are everything that you spend money on: books and supplies, transportation, food, entertainment, rent, utilities, insurance, etc. The final section - savings - shows how much you hope to save for emergencies and future goals.
Since many expenses like rent and phone bills are charged monthly, most people design monthly budgets. In order to stick to your budget, you need to keep track of your spending and review the budget periodically to make sure you are following it.
What are the Benefits of Budgeting?
Reduce stress. Most of us feel stressed about money at some point. Creating and following a budget gives you a better handle on your finances, and it can help you plan in advance for emergencies.
Find opportunities for savings. Using a budget for a month or two will shed light on areas where you may be overspending and could cut back. You might find that you're eating out more often than you thought or that you need a cheaper cell phone plan.
Feel better about your spending. Think about what you like to spend money on and work it into your budget - in moderation, of course. You won't have to feel bad about spending money on yourself if you've already accounted for it in your budget.
Plan for large expenses. As a student, expenses like tuition and on-campus housing are charged in full before the semester. Creating a monthly budget in advance of these charges can help you plan accordingly.
Search the web for personal budget templates for students, or use the simple example below as a starting point.
If you aren't ready for a budget, or if you think your finances are too unpredictable, start by tracking your spending for a month. Keep track of all of your purchases and review them at the end of the month to see what was necessary and what could have been avoided. After you've done this for a month or two, you'll be ready to factor in your other expenses and create a budget.