A Beginner’s Guide to Budgeting

High school and early college students face many challenges throughout the years. Whether it's academics, personal conflicts, or finding the right career path, it is important to develop the ability to budget. Budgeting is not just about managing money; it's about personal growth. As you embark on this new phase of life, here are four steps you can take to obtain the skills necessary to budget like a pro.

Set a Financial Goal

Before you start budgeting, it's important to establish your main objectives. This will help you stay motivated and committed. Set short-term and long-term goals, such as saving for a car, a vacation, college tuition, or a fun vacation. Sharing your goals with your friends and family is also a good idea. They can act as a support system and remind you of your purpose when you lose sight of your goals or exceed your budget.

Create the Game Plan

Calculate income and list expenses. To get started, list all your expenses, including rent, car payment, car insurance, phone bill, health care, utilities, food, entertainment, and other miscellaneous expenses. Additionally, you should calculate all recurring income sources to understand your financial situation. Now, subtract all your monthly expenses from your final net pay amount. The resulting amount will tell you how much money you have to save and spend.

Adjust Expenses to Match Your Income

If you struggle to make ends meet and find yourself living paycheck to paycheck, review your expenses to identify what you can reduce or eliminate. A great way to better understand your miscellaneous spending is to track your spending habits for one to two months.

Here are some budgeting tips that can help you save money every month. Consider reducing your optional expenses, such as how often you eat out or attend entertainment events with friends or family. It’s also common to have multiple TV subscriptions (Netflix, HULU, Peacock, Disney+, etc.), but these are often underused. To reduce subscription-based expenses, we recommend sticking with one streaming service.

Be Consistent and Calculated

Budgeting becomes easier with consistent reps. Monthly adjustments are necessary. It's helpful to plan your monthly budget one week in advance and consider any additional expenses that may require extra money.

If you have a Frandsen Bank & Trust account, you can review your income and expenses on our online and mobile banking dashboards. If you don’t have a checking account, like most young adults, open a My Checking HERE. Review your checking and savings account statements regularly for irregularities, even if you set bills to autopay. It's your money, so keeping track of it is your responsibility.

Don't let living on a budget discourage you. Believe it or not, your financial goals are within reach. With a little determination and planning, you can achieve the financial freedom you desire.