Creating a budget–a plan for how you earn and spend your money–is a great way to start managing your finances! In this article, we'll share effective budgeting tips for students.

Determine your monthly income

Your total monthly income is what you earn each month, such as pay from job(s) or income earned through a side hustle. Your income may fluctuate slightly each month depending on the hours you work, but having a general idea of what you consistently earn will be helpful in creating a budget to stick to. 

Determine your monthly expenses

Make a list of each expense you have in a given month. For expenses that vary, such as utilities or groceries, try to estimate an average that you spend on those each month. Here's a sample list of expenses to get started:

• Cell phone
• Rent/room and board
• Utilities (electricity, water, WiFi)
• Transportation (car payment, gas, insurance, public transportation passes)
• Groceries
• Subscriptions 
• Debt (credit card payments, student loans)
• Savings (how much you would like to save in a given month)
• Personal care (clothes, hygiene products, medication, cleaning supplies)
• Fun money (going out to eat, buying a coffee, hanging out with friends, etc.) 

Add the total cost of these up to determine your monthly expenses.

Balance your budget

Balance your budget by subtracting your total monthly expenses from your total monthly income. For example, if your total monthly income is $1,500 and your total monthly expenses are $1,300, you should have around $200 left over. You can keep this money in your checking or savings account to have in case of an emergency (which we recommend), or you can adjust your budget by putting some of that leftover $200 into another category, like groceries or personal care.

If you subtract your total monthly expenses from your total monthly income and the number is negative, it means you are overspending and should find opportunities to cut some non-essential items from your budget. For example, you can cancel subscriptions you don't need or use, or spend a bit less on going out with friends each month. 

Your budget can be a bit flexible and change each month depending on your financial situation, but we encourage you to try and stick to it! Need some help creating and sticking to a budget? Check out our list of four free apps to help you create a budget!

For more money management tips, be sure to check out the rest of our free money management resources to learn how to be a smart spender and saver! And if you have any job or finance-related questions for us, just text #Jobs to 33-55-77 to chat with one of our advisors (if you're on a mobile device click here to have the text message set up for you).