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"Hey, wanna go grab some take-out?" That's something you might hear a lot in college, and it's always going to be tempting, but can you afford it? If you have an endless stream of income, you can probably afford it every time. For the rest of us, this is where having a spending plan is a necessity.

Simply put, a budget is an itemized summary of likely income and expenses for a given period. It helps you determine whether you can grab that bite to eat or should head home for a bowl of soup. It is typically created using a spreadsheet, and it provides a concrete, organized, and easily understood breakdown of how much money you have coming in and how much you are letting go. It’s an invaluable tool to help you prioritize your spending and manage your money—no matter how much or how little you have. 

Planning and monitoring your budget will help you identify wasteful expenditures, adapt quickly as your financial situation changes, and 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 things can add up.  Creating a budget will decrease your stress levels because, with a budget, there are no surprises.  Unexpected car problems or medical bills?  That dream vacation your best friends are planning?  With a budget, you don’t have to panic or wonder if you have the money—you already know.  This sense of financial clarity is important not only in college but throughout life.


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 spending and income sources.


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.