5 Tips for Creating Your First Budget

Moving to a university and continuing your education is extremely exciting, and maybe a bit nerve wracking. Even if you have lived on your own for a while, you may find yourself crunching numbers in your mind as you seek a place to live and start a new life. Creating a budget is an excellent way to be financially responsible while continuing to be a successful student. If you have never created a budget before, do not worry, it is not quantum mechanics. These 5 steps for creating your first budget will set you up for a lifetime of success.

1. Know Your Income

You cannot thrive on your own without some sort of income. Before you can spend your money wisely, you have got to know exactly what is coming in. Determine all amounts of resources you will have coming in so that you may build a realistic lifestyle from that number. It may sound obvious, but many new college students begin life spending before receiving. Your goal is to thrive, and knowing your income is the first step.

2. Know Your Expenses

Knowing your expenses is a key component of building your budget. Many bills will be fixed expenses, such as rent or insurance, but others, like power, will fluctuate. Always estimate high on the bills that are not set in stone. It is better to be pleasantly surprised with a much lower bill than be shocked with something extremely high. Be sure to include all critical living expenses, such as groceries and gas, and always “pay yourself” with a set amount to deposit into your savings.

3. Crunch Your Numbers

After you know your income and expenses, it is time to crunch your numbers. If you would like to make a fancy spreadsheet, go right ahead, but a simple pen and paper budget will suffice. Balance your bills with your flow of income. If you receive pay twice a month, split your expenses, quarterly, schedule bills to be paid each week. If your expenses exceed your income, this is the time to decide what excess spending could be cut. Needs always outweigh wants. Remember, you will be collecting luxuries with time.

4. Make it Visible

Hang your budget on your mirror or refrigerator, somewhere that you will see it daily and be reminded that you are now on a budget. Seeing your due dates will be motivating prompts to allow you to prepare to make the payments. Seeing your budget will help keep you from blowing it while you are getting used to being on a spending plan.

5. Make it a Game

Budgeting does not have to be boring, it can actually be fun. Create a game with your spending and try to beat your budget. Plan your grocery trips or decrease your driving to see if you can come in below the number you have budgeted for your expenses. The less you spend, the more you can save and put towards the things you want. Watching your savings grow will be an exciting reward for following your new budget.

Creating a budget is a simple way to make starting out on your own or beginning a new life much easier. Learning how to be financially responsible will bring you success well beyond your years at the university. Canadian University Real Estate can help you begin your journey by assisting you in finding your perfect new home while attending school. For more information on living as a college student, visit our real estate page.