Budgeting is often seen as restrictive and overwhelming, but it doesn’t have to be. With the right approach, budgeting can be simple and manageable. College is the perfect time to start building good budgeting habits, and by following the steps below, you’ll be well on your way to creating a strong foundation for financial success.

 

  Know your income

Budgeting starts with understanding your income. Knowing how much money you have each month is essential for creating a spending plan. Your income may include your paycheck, financial aid, and contributions from family.

 Understanding Needs Vs. Wants

It's important to distinguish between needs and wants

• Needs are essential expenses, like bills and other "must-haves" that should always take priority in your budget.
• Wants are non-essential items—comforts or luxuries you can onsider once your needs are covered and your savings are on track.

 Review Your Spending Habits

Take a look at your spending patterns from previous months and ask yourself these questions

• Are my needs exceeding 50% of my income?
• Am I spending too much on my wants?
• Am I eating out too often?
• Did I compare prices and look for the best deals?

Tracking your spending helps identify areas where you might need to cut back. Here are some practical ways to reduce expenses:

• Food Expenses:
  • Shop once a week with a list and stick to it.
  • Compare prices and opt for store-brand items.
  • Eat out less frequently; treat it as a luxury.
  • Use restaurant coupons or student discounts.
  • Share meals with friends to save costs.
• Find free or inexpensive entertainment
  • Take advantage of free or inexpensive activities like local museums, parks, and campus events.
  • Join campus clubs or participate in Rec Center intramurals.
  • Look for discounted tickets to events.

 Create Spending and Savings Goals

Take control of your income by setting clear spending and savings goals. A common guideline is the 50/30/20 rule:

• 50% of income for needs,
• 30% for wants,
• 20% for savings.

As a student, your budget might differ. For example, you might allocate 80% for needs, 20% for wants, and 0% for savings while in school. After graduation, however, it’s important to revisit and adjust these percentages to better track where your money goes.

Set short-term goals to build better habits, such as:

• "I'll save $50 this month"
• "I'll only eat out twice this week"
• "I'll make coffee at home instead of buying it on campus"

 Start Tracking Your Current Spending

Once you know your income, understand your needs vs. wants, and identify your spending habits, it’s time to take action. Start tracking your spending to make informed adjustments and improve your financial future.

If you need help creating a spending plan that works with your student budget schedule, request an appointment at financialaid@lamar.edu with Money Management in the subject line, and we will be happy to help!