Budgeting. Not many people’s favorite word. The task of creating a budget–and sticking to it–can seem completely daunting, boring, and in general just scary.

But it doesn’t have to be. Making a budget can be easy and effective, if you stick to it. Here are four simple steps to create your own budget.


1. Calculate Your Costs

The first step is to save your receipts for about 2 weeks to a month.
If you don’t want to save your receipts, you can use your online banking (if you pay with a credit or debit card). After you’ve collected your receipts or you’re ready to take a look at your bank statement, sit down and take some time figuring out where you are spending your money. This step is probably the hardest, because you’ll be cringing at how much money you spend on food if you’re anything like me. But when you move onto the next step, it gets easier.



2. Categorize

Completing step one should give you a good idea of what types of things you are spending your money on, which can help you create your own categories for your budget.

Common categories are rent, groceries, eating out,utilities, leisure, and gas. If you spend a lot of money in other areas you can always add new categories. You can also create categories using the website Mint, which helps create your entire budget by linking to your bank account.

3. Budgeted and Actual

Now it’s time to determine the amount of money to spend for each week or month in each category. Step one should have helped you figure out how much money you’re spending in each of the categories you’ve created. After looking at your bank statement or receipts, you can decide if you need to cut back or continue spending the same. One of the most important parts of your budget is making it realistic. giphyEven if you’d like to spend less each month, be honest with yourself about how much you think you’ll actually spend.

Based off of your past purchases, what is an approximate amount that you spend each month on household items like cleaning supplies? (Note that some of these items are harder to find because they’re mixed in with grocery receipts, so when in doubt just use your intuition or estimations.) You continue this process through all of the categories.

Since I don’t buy that many household items, I only have a monthly budget for that category. In contrast I buy groceries every week, so I have a weekly budget for that section. When you are first starting your budget it’s a good idea to have a budgeted number for each week to hold yourself accountable.

Once you decide on the budgeted number for each category, create a column for it in excel. Next to that column, create one entitled Actual. The chart should look something like this.

Groceries Budgeted Actual
Week 1 $ $
Week 2 $ $
Week 3 $ $
Week 4 $ $
Household Budgeted Actual
Monthly $ $

At this stage you should have a number in the budgeted cells, I just used the dollar signs for the example. After you’ve entered all of your categories into Excel, create a section at the bottom that has budgeted and actual totals.  

At the end of each week or month, input your costs from receipts or from online banking. I always pay with a credit or debit card, so that way I don’t have to worry about saving my receipts. In addition, I set up automatic payments for my credit card, so that I’ll never miss a payment.


4. (Mostly) Stick to the Budget

This is easier said than done, but it’s important to stick to the budget once you make it so that all your hard work doesn’t go to waste.

However, it’s important that you maintain some flexibility in your budget. For example, let’s say my budget for eating out is $20 each week, but I spend $35 one week. That is okay! I could compensate for this by only going out once the next week or spending less on groceries. What is most important is that you are at or under your total budget for each month, which you can compare in your totals section.

Now that I have a budget in place, the idea of
not having a budget is what’s scary to me. Having a budget gives me peace of mind. It’s nice that I don’t have to feel guilty for going out to eat or going to see a movie, because I have already planned ahead and set money aside.

I created a budget for myself when I moved off-campus, but it’s never too early to start! If you need more help, the Off Campus Life office in Festival is a great resource to utilize. They have events throughout the year about budgeting, such as Mo’ Money, Less Problems.  

Start budgeting and you can come out of college like this:leonardo

Rather than this.. tumblr_nqs0d7ztgm1r7v8dyo1_500

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