A Beginner’s Guide to Budgeting

26 de septiembre de 2024

by Frandsen Marketing Team

High school and early college students face many challenges throughout the years. Whether it's academics, personal conflicts, or trying to seek the right career path, it is important to develop the ability to budget. Budgeting is not just about managing money; it's about personal growth. As you embark on this new phase of life, here are four steps you can take to obtain the skills necessary to budget like a pro.

Phase 1: Set a Financial Goal
Before you start budgeting, it's important to establish your main objectives. This will help you stay motivated and committed. Set short-term and long-term goals, such as saving for a car, a vacation, college tuition, or a fun vacation. Sharing your goals with your friends and family is also a good idea. They can act as a support system and remind you of your purpose in case you lose sight of your goals and break your budget. Anyone else #LoudBudgeting?

Phase 2: Create the Game Plan
Calculate Income and List Expenses. To get started, it's essential to list all your expenses such as rent, car payment, car insurance, phone bill, health care, utilities, food entertainment, and other miscellaneous expenses. Additionally, you should calculate all sources of recurring income to understand your financial situation. Now, subtract all your monthly expenses from your final net pay amount. The resulting amount will tell you how much money you have to save and spend.

Phase 3: Adjust Expenses to Match Your Income
Execution. If you struggle to make ends meet and find yourself living paycheck to paycheck, review your expenses to identifying what you can reduce or eliminate. A great way to better understand your miscellaneous spending is to track your spending habits for one to two months.

Here are some budgeting tips that can help you save money every month:
Consider reducing your optional expenses, such as how often you eat out or attend entertainment events with friends or family. It’s also common to have multiple TV subscriptions (Netflix, HULU, Peacock, Disney +, etc.), but these are often underused. To reduce subscription-based expenses, we recommend sticking with one streaming service.

Find a Budget Template:
If you're struggling to create a budget template, consider using an online budgeting tool. These tools are both easy to use and convenient and can be accessed from your smartphone. For your convenience, Frandsen Bank & Trust has budgeting templates and calculators to help guide you through this financial journey.

Phase 4:
Budgeting becomes easier with consistent reps. Monthly adjustments are necessary. It's helpful to plan your monthly budget one week in advance and consider any additional expenses that may require extra money.

Reminder: If you have a Frandsen Bank & Trust account, you can review your income and expenses on our online and mobile banking dashboards. If you don’t have a checking account, like most young adults, open a My Checking HERE.

Review your checking and savings account statements regularly for irregularities, even if you set bills to autopay. It's your money, so keeping track of it is your responsibility.

Don't let living on a budget discourage you. Believe it or not, your financial goals are within reach. With a little determination and planning, you can achieve the financial freedom you desire.

A Beginner’s Guide to Budgeting

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