Ready, Set - BUDGET!

Now that you’ve completed all of the backend work of setting up a budget, it’s time to move into the heart of it – tracking your income and expenses and verifying you’re bringing in more than you’re spending! At the core of a budget is the equation:

Income – Expenses = Surplus (if living within your means) or Shortfall (if living outside your means).

When creating a budget, you will list out your anticipated income (money coming in) for that time period. Then, you deduct your expenses (money going out) from your income with the goal of having enough income to cover all your expenses (i.e. living within your means). We can use your tracking/audit data to inform certain categories as needed. Consider your own categories, we could organize your budget in this way if you think that is best, we want to organize it in a way that makes sense for you – if you make it overly complicated or too prescribed, you’ll likely start ignoring the act of budgeting too soon... which categories would you like to include and what expenses in each? Of those categories, which ones are varied and what do we want to project as a good guess based on your data? Which common expenses are wants or needs? Will you include savings/retirement and how?

You learned some budgeting basics, explored techniques, you have tracked your cashflow, you explored tracking and budgeting tools and now it is time to set-up or update your budget. There are so many ways to set it up and it is all about your finding what works for you.

Sample budget templates are available online and in this module (keep scrolling through this module - also, check out the CAFE budget templates). If you see a sample template that you like, you may use it for your budget. Or, if your tracking tool has budgeting capabilities, you may choose to use it instead. You can also use the budget form above as a starting point. Perhaps you use a combination of tools, say an Excel sheet to map out your budget and monitoring this closely with one of the online apps. Again, it is all about you finding what works for you - so explore and see what is out there!

When choosing your time frame, think through your income and expenses and what makes the most sense. Consider labeling your budget something exciting, something that motivates you - like, "Retire Young Plan" or "Travel The World $ Plan".

In your budget, you could include the following categories (feel free to label and organize how you see fit). You want to consider savings and investments. Under each category are examples of expenses you may want/need to include:

Monthly Income from ALL sources
- Income from financial aid (grants, scholarships, loans) paid to (or for) you
- After-tax wages from a job

- Financial help from family

- Withdrawals from savings

Savings/Investing
- Emergency
- Short-Term
- Long-Term
- Retirement
University-related Expenses
- Tuition/Fees (after your financial aid/scholarship have paid if you still have a balance)
- Books
- School supplies

Household Expenses
- Rent/Mortgage
- Electricity/Gas

- Water/Sewage

- Garbage
- Internet/Cable
- Household Supplies

Food
- Groceries
- Meals out
Transportation
- Gas
- Maintenance

- Parking

Personal
- Clothing
- Gifts/Donations

Entertainment

Child Care
Personal Care/Grooming
Laundry

Pets
Phone

Insurance
- Home/Renters Insurance
- Medical/Dental/Vision Insurance
- Car Insurance

Investments
Retirement

To best understand this step, watch this narrated presentation (9:10) on projecting your income and expenses and doing the calculations needed to determine if you’ll have a surplus or deficit.

This worksheet could help you with this step.

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