I was recently talking to a friend who is graduating and getting a big person job. He had to create a budget for the first time. He said the most frustrating thing is seeing exactly how small the amount of money is going in each spot. I’ve been budgeting for almost 2-1/2 years now (so as a single and an old married lady), and it has helped me significantly to make sure we have enough money to pay all the bills (and that’s quite interesting when both of us are in college). I just thought I’d share what I’ve learned in case it can help you.
1. What are your priorities? Go ahead and list these out if you like. If you track where your money goes every month you’ll know what means the most to you (usually). It’s okay to spend money on eating out if that’s important to you. Spending time with college folks means eating out so we make sure we set aside money to do that. Just make sure your priorities are in order, and you’re not spending needlessly.
2. Don’t forget those yearly expenses. We try to hold out a little each month for yearly expenses like renter’s insurance (which you should have by the way), safety deposit fees, etc. One that snuck up on us, but is now in our budget is personal property tax. We could just try and pay it with our yearly tax return, but it’s better for us to pay it a little at a time and save up the return to help cover expenses over the summer when things are really tight.
3. Start with an Excel spreadsheet. Write down all the important categories of things you can spend money on: groceries, gas, food, etc. These can be as specific or as general as you desire. We have an “entertainment” budget, but we don’t divide it up further than that. So, movies, sporting events, date night stuff, etc go in there. Put how much money you think you’ll spend in each of these categories, and of course, make sure it adds up to how much money you’ll be bringing in.
4. Don’t forget to tithe. We try to follow 2 Corinthians 9:7 as our example.
“Each one must do just as he has purposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver.” NASB
I’ve occasionally thought of how much money we would have for other stuff if we didn’t tithe, but it’s really not worth it to us. We also try to give to individuals for personal needs or mission trips on top of what we tithe. You have to figure out for yourself what God is calling you to give. Just remember, it’s all His to begin with anyway.
5. Use cash. We haven’t been doing this as well recently, but for some of our expenses we get out the amount of cash we have in our budget and only use that. It hurts a little bit more to actually have to hand over the money as opposed to just swiping a card. You’ll be less likely to overspend. Some of the things we use cash for are groceries, eating out, entertainment, clothes, etc.
6. Sign up for an online money management program. We use mint.com. It’s a secure site where you can enter your banking information and every time you deposit or withdraw money from your account it keeps track of it. It also lets you enter in your budgets and assign a category for each time you spend money (or multiple categories). This has been beyond helpful so we don’t have to do it all in Excel or by hand.
7. Control your budget, don’t let it control you. Stay on top of your budget and try to stick to it. But if it gets to the point where it’s causing you stress then re-evaluate. Use your best judgment about using money from one category for another (obviously don’t use rent money to go to the movies). A budget is to help you, not make you go crazy or get in a fight with a loved one. If you handle the money for your family (whether 2 or 10) make sure you talk about it with them. Don’t just get upset when they don’t stick to the budget they didn’t know they were in danger of going over (voice of experience here).
I hope this was helpful for you, whether you’re a poor, single college student, just starting a family, or have kids grown and gone. It’s never too early to start a budget, even if it’s just a very simple one. It will help you get in the practice for when you actually have a decent amount of money to put in each column so we can be good stewards with what God gave us.