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"Hey! You wanna go grab some take-out?" That's something you might hear a lot in college, and it's going to be tempting to say “Sure!” every time, but can you afford it? Now that you are living on your own, that’s a question you might find yourself asking more and more. So how do you know if you can say yes to going out to eat or how much you can afford to pay in rent each month? By creating a spending plan through the use of a budget, you can start to make more informed decisions about your personal finances.


A budget is an itemized summary of likely income and expenses for a given period of time. Simply put, it’s a breakdown of the money you will bring in and what you plan to do with that money over the span of a day, week, month, semester, or year. Budgets can be made using a spreadsheet, online tool, or just a pen and a piece of paper. Regardless of what method you use or how much money you have to work with, a budget will help to keep you organized, give you a better idea of your financial situation, and allow you to feel more confident in the financial decisions you make.

Planning and monitoring your budget will help you identify unnecessary expenditures, allow you to adapt quickly if your financial situation changes, and make you more likely to achieve your financial goals.  When you actually see the breakdown of your expenses, you may be surprised by what you find; this process is essential to fully grasp how all of your spending decisions can impact you.  Creating a budget can also decrease your stress around finances. Unexpected car problems or medical bills?  That dream vacation your best friends invited you on?  With a budget, you don’t have to panic or wonder if you have the money—you already know and have a plan ready to put into action. This sense of financial clarity is important, not only in college but throughout your life. Remember- It’s Your Money. Your Choices. Your Future.

So where do you start? Continue reading for the steps in making and maintaining a budget!



Step 1: Define Your Goals

The first step in creating a budget is to set your goals. What are your financial goals?  Do you have debts you need to pay off?  Do you want to minimize the debt you graduate with?  Are you trying to save for a car, a vacation, or your future? Whatever your goals, make sure they are SMART.



Step 2: Identify Your Income & Expenses

Before you can create a spending plan, you'll need to understand your current sources of income as well as your expenses. 


Step 3: Put It All Into A Spending Plan

Your spending plan will include your current expenses plus savings needed to reach your financial goals. If your expenses plus savings is greater than your income, you'll need to figure out ways to cut down on your spending.

Step 4: Put Your Plan Into Action

Budget apps make it easy to monitor your spending plan.  They can help you keep an eye on your account balances, remind you to pay your bills on time, and track your spending to help you stay within your budget.    When deciding which one to use, be sure you pick one that is secure.


Step 5: Evaluate Your Plan Periodically

Are your financial goals on track?  If not, then take a look at your spending plan and determine why its not working.