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Establishing a Budget
Defining your personal budget can lend structure to your spending habits. It is a way of organizing your use of money by thinking in terms of spending categories and setting priorities. A budget establishes boundaries that you can monitor to pace your spending and it helps you recognize spending limits before you exceed them.
Budgeting as guidance
Thinking of finances in categories helps you discipline yourself in those moments when you are tempted to choose between something you need and something you simply want. Just as a blueprint guides the building of a house, a personal budget acts as a guidance system to steer you away from costly impulses and money-burning behaviors.
Creating a budget while in college can help you:
College Budgeting 101:
Peer pressure and conveniences such as automatic teller machines can play havoc with student budgets because ready cash makes it easy to buy things on a whim. A budget can help you sidestep impulse spending. It puts you in control of the decision to buy or not to buy based on your needs and available cash.
The time period of a student budget can be a month, a semester, or the school year. After listing all income, estimate how much money you will spend on the fixed and variable items in your budget. Fixed items are a constant and easily defined. Variable expenses are more difficult to identify because of their changing nature. Keep a daily record of your expenditures for a few weeks to better estimate the kind and amounts of your variable expenses.
Examples of Fixed Expenses
Examples of Variable Expenses
Compare total estimated expenses with your total income, and then adjust the variable expenses in order to balance your budget. Your spending practices will have a significant effect on shaping your financial security, and a budget helps you keep spending from getting out of control. Effective use of a student budget will help you gain the sense of independence that comes from being in control of your personal financial affairs, whether you have "plenty of money" or limited income.
Tips to help you stay on track
The following links allow you to calculate your budget using established income and expense categories.
The following link is a blank expense worksheet that you may print and fill in your expenses. You may customize the layout to a format that works for you.
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