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One of the great things about a new school year is that it’s much like New Year’s-you get the chance for a fresh start. That’s why it’s crucial to create a budget right at the beginning and follow through with it the entire year.

Last September, Natasha R., a senior at Loyola Marymount University in Los Angeles, California, picked up her usual necessities-pens, notebooks, binders, and even a new backpack-but one particular item made a huge difference in her financial life: a budget planner.

“I had never thought of creating a budget for myself at this age,” she says. “But it really does make a difference, and allows me to see exactly where my money is coming from and where it’s going.”

Why Budget?

Creating a budget helps you spend less than you earn so you can save up money for big purchases and financial emergencies like losing your job or an unexpected car expense.
It’s also a stress reliever. “The stress of a financial life that feels out of control is often a huge barrier to academic success. Many students cite financial issues as a major factor in their decision to leave school,” says Angela Caddel, the director of communications at Oklahoma Money Matters, an initiative of the Oklahoma College Assistance Program and the Oklahoma State Regents for Higher Education.

Fortunately, says Caddel, “Taking control of personal finances can be empowering.” She suggests three things:

  • Learn to distinguish wants from needs.
  • Prepare for unexpected expenses.
  • Borrow student loans wisely.

In a recent Student Health 101 survey, the majority of students said they’ve already created a budget, but more than 36 percent haven’t. Many students don’t because they don’t have the time, or they relate to Jeff W., a sophomore at Washington University in St. Louis. He says, “I wouldn’t mind creating a budget, but to be honest, I don’t know how or if I even have the tools to do so.”

How to Create a Personalized Budget

Luckily, setting a weekly budget only requires tools as basic as a pen and paper, but you can also use ledgers and spreadsheets on your computer, or even an app to create one.

Here’s an easy step-by-step guide:

Figure out what’s available to spend. 
This is when you calculate your income by adding together all of the money you bring in a month through jobs, federal loans and grants, scholarships, and any other income. Make sure you don’t include unreliable funds such as monetary gifts. To figure out your weekly income, divide the total by four.

Create a list of your weekly expenses. 
This includes everything from daily coffee to a night at the movies, bus fare, and food shopping. Whatever you have to pay for, include it. It’s best to categorize all of your expenses into groups, such as:

  • Food
  • Entertainment
  • Clothing and personal care
  • Academic
  • Travel
  • Miscellaneous

Write down the estimated amount of money you spend on each item on your list. Caroline M., a junior at Quinnipiac University in Hamden, Connecticut, splits her expenses into two categories: fixed and variable. “Costs that I know will stay the same, like my parking pass and phone bill, are fixed expenses,” she explains. “I never know how much I’ll be spending on lunch, so that goes under variable expenses.”

Compare your income and expenses. 
Subtract your total expenses from your total income. If you have money left over, pat yourself on the back, because you have a positive cash flow!

Consider putting the extra money into a savings account, which will be handy during emergency situations or when you want to splurge on something.

If your expenses exceed your income, you’ve got a negative cash flow and it’s crucial that you rethink your spending. Start by separating your wants from your needs.

“I didn’t think spending four dollars on coffee every day really added up, but I realized I’m spending over 90 dollars a month on something I can live without or easily make at home,” says Ryan J., a senior at the University of Florida in Gainesville.

Sticking to Your Budget

The key to staying on budget is self-discipline. Robert T. Kiyosaki, author of Rich Dad, Poor Dad, says, “Lack of self-discipline causes most lottery winners to go broke soon after winning millions.” Here are some tips:

  • Albert R., a student at Colgate University in Hamilton, New York, says, “Staying updated with your bank accounts in general is useful.”
  • Make lists before shopping. If you see something else you like, ask yourself, “This isn’t on my list. Do I need it now?”
  • Tell those you’re close to about your budget. Your friends probably have spending limits, too, and you can help each other avoid temptations.
  • Credit card companies market cards to college students and low interest rates might seem attractive at first, but get jacked up almost immediately. Avoid using credit as much as possible.

Francine D., a sophomore at St. Mary’s University in San Antonio, Texas, suggests using only cash for daily expenses. “I withdraw the exact amount of money my budget allows me to. Once it’s gone, I know I’ve reached my limit,” she says.

Setting a weekly budget and sticking to it may be a little work, but the benefit of having a fuller wallet is worth it.

Take Action!

  • Track how much money you spend for a month or two.
  • Compare how much you’re earning and spending.
  • Gather and organize all receipts and credit card statements.
  • Distinguish between needs and wants to ensure frugal spending.
  • Open up a separate bank account for savings.

Apps for Budgeting

Tracking your budget has never been easier thanks to technology, particularly smartphones. No matter how busy your schedule may get, apps are convenient for organizing your weekly budget.

Some great apps include:

My Weekly Budget (MyWB) by AvocSoft LLC
Available for: iPhone, iPod touch, and iPad
Where to find: iTunes app store

MoneyWise
Available for: Android
Where to find: Google play

BillMinder by return7 LLC
Available for: iPhone, iPod touch, and iPad
Where to find: iTunes app store

Mint
Available for: PC, Mac, Android, iPhone, iPod touch, and iPad
Where to find: mint.com
iTunes app store
Google Play

Cash-Strapped by John Griffiths
Available for: iPhone, iPod touch, and iPad
Where to find: iTunes app store

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