A monthly expense calculator is a tool used to help you put together a budget and start managing your money. For college students, beginning money management early is essential to your path towards financial success.
Not only can it help you start saving money for the future, but it will prepare you for those days when expenses get tight, and you’re paying student loans. This might seems years away right now — it comes much faster than you think.
So, using a monthly expense calculator can help you get started.
What is a monthly expense calculator?
It’s an automated online calculator that takes all of your expenses and puts them against your salary. It will give you a clear picture of the money that comes into your account and the money going out.
Knowing where your money is going can help you make cuts to start saving more or putting your money towards more important things (like early student loan payments).
How does a monthly expense calculator work?
First, you’ll want to gather all of your income and expense information together. You can do this by looking at a month-over-month view of your bank account and your pay stubs.
Once you have all the information you need, the calculator will walk you through what expenses need to enter.
Then it does all the calculations for you.
What information do you need for an expense calculator?
A Google search will lead to several expense calculators, each with its own format and way of calculating your expenses.
In general, they all have a few things in common. They include:
- Your monthly salary
- Mortgage or rent payment
- Credit card payments
- Personal Loans
- Auto expenses
- Household supplies
- Additional miscellaneous expenses
How do I use an expense calculator?
First, you’ll want to take note of all your monthly expenses. The best way to do this is to log into your bank account and take a look at all of your recurring transactions. That will give you a sense of what you’re spending monthly.
Some banks will also allow you to see how much you’re spending in those miscellaneous areas like entertainment, restaurants, and shopping.
Once you have all that information, you’ll input the figures into the expense calculator. It will calculate your expenses against your salary to give you an idea of what you’re spending each month.
Next up, you’ll want to take that information and put it into a monthly budget that you try and stick to. Give yourself a little wiggle room for the first couple of months. It can take some work getting used to tracking your expenses and staying within your budget at first.
You don’t necessarily need a calculator to get started, but it can be a big help. Whatever you do, get started early. You’ll be surprised how much it can help you when it’s finally time to graduate college and take on all those big, real-life responsibilities and expenses.