A budget is a tool used to visualize one’s current financial condition and set financial goals accordingly. Creating a budget means learning to choose where your money is going, rather than wondering where it all went. A successful budget can help you identify your needs versus wants, control wasteful spending, and adapt as your financial situation changes over time.
- Income: Income may come from a number of different sources, including your paychecks from work, contributions from parents, other support from family, and financial aid refunds.
- Fixed Expenses: These are expenses that remain the same on a month to month basis (i.e. rent)
- Variable Expenses: These are expenses that fluctuate from month to month depending on personal use (i.e. utilities and vehicle fuel)
- Periodic Expenses: These are expenses that occur once every few months (i.e. vehicle maintenance)
- Discretionary Expenses: Otherwise known as personal expenses (i.e. clothing and entertainment)
- Set a Foundation for Expenses
- Establish guidelines on how much money you will put towards different expenses
- Consider using budget percentages
- Housing: 25-35%
- Insurance (including health, medical, auto, and life): 10-20%
- Food: 10-15%
- Transportation: 10-15%
- Utilities: 5-10%
- Savings: 10-15%
- Discretionary: 5-10%
- Miscellaneous: 5-10%
- Add Up All Sources of Income
- Paychecks, family support, financial aid, etc.
- Evaluate Expenses
- List your general expenses, compare them to your income and determine if changes need to be made.
- Track, Trim and Target
- After creating your budget, track your actual income and expenses. You may be surprised to see what you spend on unnecessary expenses. Adjust your budget to fit your lifestyle and financial goals.
Smartphone apps, spreadsheets and sometimes your bank offer helpful tools for creating a personalized budget!
Try this budget calculator to help you manage your money and avoid overspending.
Monthly Income Estimate
|Income||$692||19 hours/week at $10/hour|
|Financial aid refund||$1250||$5,000/semester|
|Allowance from parents||$50|
Monthly Expense Estimate
|Savings||$50||Pay yourself first|
|Rent||$1476||$5906/semester on campus housing|
|Utilities||$0||Utilities included in rent|
|Grocery||$30||Meal plan included in rent|
|Insurance||$232||UT Student Annual Plan|
|Vehicle Expenses||$0||Student uses FREE public transportation with UT Student ID|
Monthly Income vs Monthly Expenses: $ 1992 – $ 1938 = $ 54