You probably have heard the word “Budget” get thrown around in various stages of your life. As you get older, budgeting plays a more prominent role in your financial foundation.
While in college, creating a household budget helps you manage your money by controlling your spending, staying away from debts, and saving money for emergencies. Whether you have an allowance, savings, or pay your way through college with a part-time job, having a budget will provide a clear picture of what’s coming in and out of your bank account.
It’s very easy to overspend by buying unnecessary groceries, decorations, or simply eating out too often.
Here are a few steps that will create the perfect “Household Budget” while in college!
Find a budget spreadsheet
Finding a budget spreadsheet can feel like a hassle, but luckily, we put together a list of our favorite top monthly budget spreadsheets. These spreadsheets are available online to help you get started today!
List your income
Listing your income might be the easiest step. First, list your sources of income, including work-study, internship, child support, etc. Then, the budget spreadsheet will use your income and your monthly expenses to calculate your net income.
Sum up your expenses
Your household expenses will consist of fixed and variant costs. Fixed expenses are mortgage/rent, phone bills, car insurance, and subscriptions – variant costs are typically groceries, water, electricity, gas, etc. When summing up your expenses, be sure to list both forms of expenses.
Although some of these expenses don’t happen every month, we suggest writing down what you plan to spend for each monthly expense. For instance, you might want to spend $100 a week for groceries, which means that you spend $400 a month for groceries. Therefore, you should list $400 as your groceries expense for the month.
If you need help figuring out what you usually spend each month, your bank and credit card statements will come in handy. In addition, your monthly reports will give you a clear view of all your expenses.
Calculate your net income
Your net income is an estimate of how much money you will have left after accounting for all your household expenses. You can calculate your net income by subtracting your monthly expenses from your monthly income. The concluding net income can go towards your savings, loan debt, and/or fun extracurricular activities.
Track your budget
If things change – like your utility bills going up or you landed a more lucrative job, update your budget. Try to stick to your initial budget plan with the help of the spreadsheet. Keeping that in mind, whenever things come up, be sure to update your budget to reflect any recent changes.
Remember: Living within a budget will organize your current financial situation and help you plan for an exciting future.
As you can see, budgeting doesn’t have to be a hassle. By following the budgeting steps we provide, you can even get started today!