Whether you are trying to reduce debt or interested in pursing investment opportunities, creating a budget is the best place to start. Budgets give you a realistic picture of how much money you are bringing in and spending in a given month. There are many tools, calculators, apps, and worksheets online that can help with this process. Or use the attached excel worksheets to get started.
Simply input your income after taxes and other sources of income (benefits, stipends, allowances, etc.) and subtract reoccurring expenses, including essential and nonessential expenses. If spending varies from month-to-month, averages or estimates can also be used.
- If you have a surplus of cash, you can decide what to do with your additional money. Some options include:
- Contribute to emergency fund to cover unexpected expenses in the future
- Pay down credit card or long-term loan debt
- Increase your retirement contribution
- Invest a portion of your income in stocks, bonds, or cash equivalents
- Or adjust your budget to allow for a few additional discretionary items, like entertainment and travel
- If you are spending more than your income, look for ways to cut your expenses.
- Eat out less and plan to make affordable meals from home
- Cut non-essential entertainment expenses, such as streaming video subscriptions
- Consider taking advantage of free public services, such as books, audiobooks, and media available at your local public library.
- Conserve energy to reduce utility expenses
- Negotiate with credit card company to reduce interest expenses
In general the 50/30/20 framework is a good rule of thumb to shoot for in your budget. From your net income after taxes, fifty percent of your income to should go towards living expenses, such as housing, food, utilities, and transportation. Thirty percent should go towards discretionary spending or "wants" such as clothes, entertainment, and eating out. Finally, twenty percent should go towards your future financial goals, whether that be saving and investing in your future, or paying down debt.
- Budgeting 101 Video
Video developed by 360 degrees. Video Description: Creating and sticking to a budget is the most important thing you can do to build a bright financial future. Check out this video featuring Michael Eisenberg, CPA and member of the AICPA’s National CPA Financial Literacy Commission to learn more.
- Making a Budget (Consumer.gov)
Outlines the steps and reasons for making a budget, and provides worksheets and videos to explain the process.
- Practical Money Skills for Life: Budgeting
An overview on budgeting, with a worksheet and calculators. Sponsored by VISA.
- Start Saving (cfpb)
Guide to building an emergency fund, saving at tax time, opening a banking or credit union account, and more.
Other Budgeting Tools
Budgets start with a salary or income, and for those preparing to graduate soon, it may be worth looking at salary benchmarks, salaries by location, and cost of living before you accept that offer letter. Here are a few resources to inform your big decision.
- Occupational Outlook Handbook
Search for occupations by pay, education level, number of projected new jobs, and growth rate.
Data compiled from public sources by Deloitte and Datawheel. Offers easy to digest information of occupations, industries, education, locations, and more.
- Salary by State
Developed by Rasmussen University, this resource allows you to search for average salaries by occupation and state.
- Cost of Living Calculator (Bankrate)
Use the cost of living comparison calculator below to compare the cost of living in two cities. Simply enter your current income, select your current city, as well as the city you are relocating to and click calculate. The cost of living calculator will provide you with the equivalent income needed to maintain your current standard of living.
- Family Budget Calculator (Economic Policy Institute)
Family Budget Calculator measures the income a family needs in order to attain a modest yet adequate standard of living. The budgets estimate community-specific costs for 10 family types (one or two adults with zero to four children) in all counties and metro areas in the United States.
- Cost of Living Calculator (STATSIndiana)
Compare the cost of living from other U.S. to cities in Indiana. This calculator uses continuously updated data pulled directly from the highly regarded ACCRA Cost of Living Index to make cost comparisons.