1. Creating a Budget
This Module is designed to help students build a proper budget and encourage smart spending.

2. Introduction Do you not know where your money is being spent?
Do you often run out of money before you expected?
Do you think you could manage your money better?
If you answered yes to any of these questions, creating a budget can help you!

3. Basics of Budgeting
Having control over your money is important, both for your financial well-being and for your peace of mind
Creating a budget with the help of a template can help you feel more in control of your finances and allow you to save more money for your short- or long-term goals

4. Did you know . . .
Money is the number one reason for divorce in the United States.
Financial Infidelity – may be the new normal.
In a recent survey – 1 in 3 Americans (31%) who have combined their finances admitted lying to their spouses about money, and another 1/3 of these adults said that they have been deceived.
Breakdown of Money Lies
58% hid cash
54% hid minor purchases
30% hid a bill
16% hid a major purchase
11% lied about debt
11% lied about earnings

5. College Students Today
40 million Americans have student loans. More than 70 percent of U.S. students who graduate with a bachelor’s degree leave with debt, which averages $28,400 – The White House (projectonstudentdebt.org)

6. Set your goals
Make a list of all the financial goals you want to accomplish over the short and long term
Why are those goals are your priorities?
How do you plan to achieve them and how quickly do you need to see the results
Short-term goals should take no longer than a year to achieve
For example, you may want to pay off your credit card debt or save up for holiday presents
Long-term goals may take years to reach
For example, saving for retirement or your child's education
Don't think that your goals have to be set in stone, you can update your list whenever it's needed and apply it to your budget worksheet
If you don’t know where your savings goal should be, start by using the Merrill Edge retirement calculator to figure out how much money you may need in retirement

7. Make your plan
Start by dividing your net income into 2 broad spending categories
Fixed & variable expenses
Fixed expenses stay the same each month
Mortgage or gym membership fees
Variables expenses change from month to month
Entertainment or gas for your car
For both fixed and variable expenses, you'll want to record how much you spend on each
You may consider using a personal budget template to account for and categorize your monthly spending.
You may also want to divide your spending into 3 basic categories
needs, savings, and wants
Needs include fixed and variable costs that are essential to your daily well-being
Savings include your emergency fund and retirement accounts
Wants covers everything else

8. Know your net income
Identify the money you have coming in, otherwise known as your income
Keep in mind that it's easy to overestimate what you can afford if you think of your total salary as what you have to spend
Remember to subtract your employer deductions
Social Security, taxes, 401(k) and flexible spending account allocations
Your final take-home pay is called net income and that is the number you should use when creating a budget

9. Track your spending Expenses can be difficult to track
Spending journal
Find a small notebook and use it to write down each purchase you make every day for a month
Save all receipts
Add them up at the end of the month
Online banking record
If you use a debit or credit card for most purchases
Smart phone apps
Expense IQ
Once you have a good estimate of these expenditures each month, incorporate it into your personal budget worksheet

10. Create a Monthly Budget
Did you stay within your budget?
Income
Expenses
Pay Check $
Rent $
Financial Aid $
Groceries $
Scholarships $
Entertainment $
Gifts $
Utilities $
Total
$ 1,850.00
Miscellaneous
Dining out $
$ 1,250.00

11. Understand Where Your Money is Going

12. Small Purchases Add Up Grande White Chocolate Mocha @ $4.25
$4.25 x 30 days = $
$4.25 x 365 days = $ 1,551.25
8in Italian Night Club from Jimmy $5.75
$5.75 x 30 days = $
$5.75 x 365 days = $2,098.75

13. Personalize your budget
You can customize a budget to your own needs
After you've determined what to set aside for your fixed expenses, you can alter the amount earmarked for variable items
The variable category gives you more wiggle room in how much you decide to spend where, allowing you to prioritize as you see fit
For example, you might decide you can spend less on clothes each month in order to give yourself more money to save toward buying a new TV

14. Have a monthly check-in
Take a look at your spending every month and compare it to your personal budget worksheet to see how things are going
If you find that you're often going over-budget in some areas out of necessity, you should consider cutting elsewhere to keep things under control

15. Work Cited
Bank of America
Reuters