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Have you ever been in line at Starbucks placing your usual order, but your card is declined when you go to pay? You check your bank app, and lo and behold, you’ve over-drafted your account. You, my friend, need to start budgeting. But budgets bring up questions like “What even is a budget? And “Where do I even start?” Sitting down every month and figuring out a budget method that works best for you can be intimidating. Here are some answers to all your budgeting questions.

What is budgeting?

Budgeting is balancing your expenses with your income. It’s the process of figuring out the amount you get from your income and finding a good spending plan for it. If you don’t find a good balance, you can run into some financial issues, such as spending more than you make. Budgeting allows you to spend your money with purpose. This plan will help you save monthly and when you find a method that works for you, you can eventually start saving for both your present and your future. As you transition from a young adult to a “real” adult, this is an important skill you must acquire early on.

Why should I budget?

Saving money can be a really difficult thing to do. It seems like a simple concept, right? Anything that isn’t spent on bills or gas is just spending money, but it’s more than that. The budget is the financial blueprint to your goal. By budgeting, you get a clear picture of how much you’re spending and saving in your day to day life. This also allows you to plan out and set goals to work on every month or so. This is the best way to stay out of financial struggles. Budgeting lets you set aside money for a rainy day whilst learning how to discipline yourself when it comes to your spending habits.

How do I start budgeting?

There are many methods of budgeting. The easiest way to start documenting a budget online is with a template. I use and love this Google Doc template titled “Monthly Budget”; it has all the necessities! But there are many templates out there to get you started. Look through a couple and get a feel for them until you find something you think works the best for you. Wherever you’re ready to budget, here are the initials steps to help you get started.

  • To begin, you need to identify your income, and when you get it. Do you get paid weekly? Or maybe your financial aid comes in once a quarter. It’s important to know this before you start.
  • Now that you’ve done that, you need to identify your regular costs. This is stuff like rent, utilities, school/tuition, groceries, WiFi/ cell phone bills and entertainment. How much do you spend? Be honest with yourself; if you aren’t, there is no point in creating a budget.
  • The next step is to stick to your budget and review it frequently. Save your receipts and try to track your weekly spending. A spreadsheet allows you to identify where the money went and where exactly you are performing well (or underperforming). Doing this makes the following month’s budget more accurate.
  • The final step is to change your spending habits. Wherever you choose to budget, you won’t get the best outcome if you don’t change your spending habits. Figure out what parts need to change, whether it’s eating out or changing your phone plan as a whole. Identify where you’re overspending and fix that.

By following these steps, you can build a good budgeting system that fits your personal needs. Remember, this is a learning process, if you don’t get it immediately, that’s okay. Keep trying until you find the budget that works best for you.

Hey, my name is Joanna but I go by Joe. I’m a Journalism major at SJSU. I love music, plants, photography, and writing.
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