Budgeting 101: Creating a Budget & Sticking to It

Posted by ginger$nap on 09.07.16

With the total student loan debt in the United States hovering around a mind-blowing $1.23 trillion, it’s important to be smart about budgeting and managing your money while you’re in school so you’re not one of the 43 million Americans drowning in student loan debt.

Creating and managing a budget isn’t the most fun in the world, but it’s not as much of a hassle as you might think, either. Plus, it’ll help you stay on track during school and avoid graduating with heaps of debt.

budget-sheet-downloadFor starters, you’ll want to figure out whether you want to track your budget per month, per academic semester (or year), or per calendar year. Once you’ve chosen a timeframe for your budget, you’ll want to decide what tool or tools you want to use to track it. You could go old school with pen and paper, or you might opt for using a computer spreadsheet, or maybe your phone is your life and you’d prefer to use a budgeting app. Georgia’s Own BALANCE Financial Fitness program offers free resources to help with budgeting, and we’ve also created an budgeting spreadsheet to help you track your income and expenses (download it for free here). I personally love Mint – it’s simple to use, secure, and automatically updates all of my accounts in one place. Whatever you choose, make sure it’s a tool you’re comfortable with and one you’ll actually use.

Here’s what you’ll need to create your budget:

  • Your income: Be sure to include all sources of income, including wages, any financial aid refund, and any contributions from family.
  • Your expenses: Expenses include fixed expenses like your cell phone or rent, as well as variable expenses such as dining out or gas for your car (if you have one). For your initial budget, you may have to estimate some expenses until you have a better idea of how much you spend on that category.

The next step is adding up your income and your expenses so you can balance your budget. To do this, you’ll subtract your total monthly expenses from your total monthly income. The goal is to have a positive balance, meaning you’re earning more than you’re spending. If you have money left over each month, you can save it or even start paying on your student loans (if you have any), since they do accrue interest while you’re in school. (Read more about why paying on your loans while in school is a good idea).

If your balance is negative, you’re spending more than you’re earning and need to adjust your budget. You can cut back on expenses or find a way to supplement your income, such as getting a second job.


Now that you’ve created and balanced your budget, there are two more important steps in maintaining that budget:

  1. Review your budget monthly – doing so will help you stay ahead and avoid surprises.
  2. If you make a spending mistake, don’t dwell on it. Next time you’re tempted to make an impulse purchase, ask yourself if you really need that item and if so, can you afford it?

Developing good financial habits in college (or earlier) not only helps you cut down on student loan and credit card debt acquired throughout school, but also helps sets you up for success later on in life. Trust me – things like credit scores and savings accounts may seem trivial now, but it’s a lot easier to start off strong than to find yourself in heaps of debt after school and trying to correct mistakes that could have easily been avoided.

Do you follow a budget? What do you find the hardest about sticking to a budget? Let us know in the comments or connect with us on Facebook and Twitter!

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