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Creating your Budget

Follow our steps for making an effective budget:

Identify a Time Frame

What length of time is this budget for?

  • Weekly
  • Monthly
  • Semester-based

Once you get more comfortable with budgeting, you can create budgets for even longer periods of time, such as a yearly budget.

Do the Math

Calculate your income and expenses for your given time frame to determine how much money you have to work with.

What kind of compensation do I receive?

  • Hourly
  • Salary
  • Commission-based

How often do I get paid?

  • Weekly
  • Bi-weekly
  • Monthly

Do I understand my paycheck?

  • Gross vs. net income
  • What taxes and fees are deducted?

 

Before you begin calculating your expenses, determine whether they are fixed or variable. 

FIXED

The cost of fixed expenses does not change.

fixed expenses

Example: Car insurance and rent are examples of fixed expenses

VARIABLE

The cost of variable expenses does change.

variable expenses

 

Example: Food and credit card payments are examples of variable expenses.

Helpful Hint:Taking note of when bills are due is a great way to keep track of your expenses. In addition, keeping a spending diary will help track of how much you're spending and where your money is going!

Review and Adjust

After a week/month/semester, revisit your budget and ask yourself:

  • Have I been over/underspending?
  • Where has most of my money been going?
  • Is my method working?