Debt Management Tips - Budgeting Your Money
The key to successfully managing your money is planning. Controlling your expenses through budgeting requires understanding simple budgeting techniques. Budgeting your money requires planning and an understanding of the budgeting techniques. Listed below are some of the steps to take in the budgeting process.
Step 1: Calculate Income Sources
The first step is to determine the amount of income, either fixed or projected, that you have available for each semester/academic year to cover your expenses. Some examples of income include:
- Earnings from work (including spouse, if you are married)
- Support from other individuals, such as family
- Savings/checking accounts
- Financial aid awarded
- Benefits (i.e., Social Security Benefits)
Step 2: Subtract Expenses
List the expenses that you incur for the semester/academic year. There are two kinds of expenses: fixed expenses that do not change, and variable expenses that may change due to varying costs and conditions. Expenses include:
- Tuition and fees (fixed)
- Food and Housing (may be fixed or varied)
- Books and supplies (varied)
- Transportation (varied)
- Personal expenses (varied)
- Insurance (fixed or varied)
- Clothing maintenance (varied)
Step 3: Determine Budget
Subtract your expenses (Step 2) from your fixed or projected income (Step 1) for the semester/academic year. If your expenses are higher than your income, you will have to determine ways to reduce your spending or increase your income. For ways to reduce spending, click Stretching Your Dollars.