Budget Basics:
First, find out what your true spending habits are. For one month, keep all receipts and record all purchases. At the end of the month, group your expenses into categories, such as food, clothing, insurance, transportation, household expenses, entertainment/recreation, savings, etc. Next, evaluate your priorities and decide if you need to make changes in your spending habits.
You can now create a budget-a plan for spending that is consistent with your needs and priorities:
- List all sources of income, after taxes.
- List the monthly expenses which are set, such as rent, car payment, insurance, etc.
- List expenses you have some control over. Food, gas, some utilities, and long-distance or cell phone bills depend to some extent on your choices.
- Allot money for savings every time you get paid, even if only $10.
- Give yourself some discretionary money for the other non-mandatory expenses, but do not exceed this amount. It may help to get this money in cash, so you can see exactly what you have to spend. This helps to weigh the options, like buying new CDs, new clothes, or eating out, in light of your budget.
Download a budget worksheet to plan for the school year:
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Editable Budget