Budgeting - Iowa College Access Network - ICAN

Budgeting

Maybe you're already responsible for a few of your expenses (like cell phones or car insurance), or maybe you pretty much pay your own way in the world. Whichever is the case for you, a budget can help you track where your money goes and control spending. And, knowing how to budget can come in handy after college when your expenses go up more quickly than your income.

To create your monthly budget:

1 Identify your monthly income.
  • Do you have a job?
  • Do your parents give you an allowance?
  • Do you regularly get gifts of money?
2 Keep track of your spending
  • Include fixed monthly bills like car payments and insurance.
  • Estimate monthly spending on things like clothes and entertainment.
3 Subtract your expenses from your income to find your balance.
4 Look at the result.
  • If you have a positive result (your income is larger than your expenses):
    • Keep up the good work.
    • Try to save most of your extra income for the future or an emergency.
    • Set goals so you don't spend all your savings at once.
  • If you have a negative result (you're spending more than you're making):
    • Try to reduce some of your expenses, especially items you don't need.
    • Increase your income with more hours at work; filling in with odd jobs.

Learning to live on a budget is a life skill. No matter how much or how little money you make, you need to know how much you can spend and how much you should put away for the future.

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