How to Create a Budget (Without Getting an Economics Degree)

Believe it or not, it’s actually not too difficult to make (and stick to!) a budget. You can make the most of your cash by simply figuring out how much you have and then deciding how much you can spend. Easy, right?

Start with income. Do you get an allowance? Have a part-time job? A scholarship that pays for living expenses? Calculate how much money you take in per month. Don’t forget to include your after-tax job income (you may make $8/hour, but some of that will be eaten up by taxes before you ever see it!) You may also be taking money each week out of your savings (from a Summer job for example), so calculate how much of that you can spend each week without going broke before May.

Now figure out how much you absolutely MUST spend each month–these are the essentials, like rent (if you pay rent, or housing fees), transportation, loan payments, etc. If you have a meal plan and never eat out, you can throw that in there as an essential expense. Once you see how much you have left, you’ll be able to decide how much you want to spend on groceries and how much you can afford to eat out.

Alright, now subtract the essentials from the income (hopefully you won’t get a negative number!). Divide by 4, and this is approximately how much you can spend each week on everything else: food, booze, magazines, books, toiletries, concerts, clothes, etc.

Spend a few weeks keeping track of how much you spend–online banking is great for seeing what you use your debit card for, but it’s those trips to the ATM that will leave you wondering where all your money went.

Save receipts from cash transactions instead of just throwing them away, and start looking at what you spend–you may be surprised! In New York City, a tall Starbucks latte can cost almost $4–get one every day on your way to class and that’s $20/week, or $80 month! Yikes. No one is asking you to give up your latte, but maybe try cutting it down to 2-3 times a week instead of 5. Or maybe switch to the local coffee cart or on-campus coffee shop.

Just can’t get enough of your magazines every month? Most publications offer HUGE discounts if you subscribe–Lucky Magazine, for example, charges $3/issue each month on the news stand, at a yearly cost of $36. A one-year subscription, however, costs just $12.

Try to buy groceries and use whatever kitchen space you have instead of eating out. Breakfast is so easy to make at home (cereal, yogurt, fruit), and you can pack a sandwich for lunch if you won’t have time to go back to the dorm during the day.

Think about putting some of your income into a savings account instead of just leaving it in a checking account (or in a box under your bed!) Savings accounts will give you a small amount of interest, so it’s like making money without doing anything at all!

Here’s what my budget looks like right now:


$12/hour part-time job at 25 hours/week = $1000/month (after tax)


Rent: $475/month

Transportation: $76/month

Cell phone: My parents help out with this, since we’re on a family plan. I contribute $10/month.

So that leaves me about $102/week for everything else.

I have a nice big kitchen, so I splurge on groceries (about $40/week), leaving me with $62 for other stuff. It can go pretty fast, so I like to drink tea (cheaper than coffee), order appetizers when I eat out (cheaper than entrees) and I always order beer (cheaper than mixed drinks).

The best thing I ever did was keep track of my cash–I was spending tons of money each week on bottled water (I have my own re-usable bottle now) and trashy gossip magazines (I read Perez Hilton now–trashy AND free!) Now, when I have some money left over, I put it into my savings account

Obviously everyone’s budget will look different, but hopefully your snazzy new money plan will allow for some financial wiggle room, so you can finally buy something you really WANT, instead of spending it all on just the stuff you need!

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