Build a Budget, Step by Step

In Brief:

  • A list of tips and tools for effective budget-building.

  • Budget planning advice to help students stay on track and save money.

Blog Post


Setting up a budget is easy. Sticking to one? That can be a lot harder. To help students stay on track, we’ve put together a list of tips and tools for effective budget-building.

Step 1: Define your goals (and why they exist)

If you’re thinking of starting a budget, take a moment to think about how it would help you. Are you hoping to save for an emergency fund? Is the budget out of necessity? Do you just want to stop feeling guilty whenever you spend money? Any of these reasons are absolutely acceptable — but if you take a step back, you may find an underlying motivation to keep your budget going down the road.

Step 2: Know where your money goes

Before you start budgeting, take some time to review your spending as it currently stands. What are you spending the most on? Food? Clothes? Housing? School? Determine which expenses are necessary and which are a little more flexible. Take into account monthly and annual expenses (Christmas happens every year). Get all of your information in one place so you don’t have to hunt it down later.

Step 3: Find the right budgeting tool for you

 There’s plenty of free online budgeting tools and apps. If you’re looking for a budget you can build online, try apps like Mint or You Need a Budget (YNAB). Want to take a more pen-and-paper approach (or just want an idea of where to start)? View and print out our budgeting worksheet. There’s no “right” way to budget —  whether you write your budget down or set it up online, it’s simply important to make sure it fits your needs.

Step 4: Build your budget

 If you’ve done your work in step two, this may not take long at all. Set up categories like housing, education, and food, then enter the amount of any planned expenses that fall under them. Once planned-for bills and expenses are accounted for, take a look at how much income you have left.

Step 5: Follow your budget (but be flexible)

There’s no point in having a budget if you don’t follow it — but that doesn’t mean it can’t be flexible. You can still spend money on things that are fun and valuable in your life (and, in fact, you should)! In your budget, make sure to account for entertainment, and adjust the amount as needed. If you spend less than the budgeted amount, you’ve saved money. When you’re a little over budget, look at your spending for the month. Is there any category you’ll be spending less in? Use those funds where you need to (or see if there’s the opportunity to cut spending. Your budget is a living tool — don’t be afraid to change it as you need to.

Bonus step: Find ways to save

When it comes to saving, little steps go a long way. Going out with friends is far from a bad thing, but if it’s a regular occurrence, it can take a huge hit on your finances. Instead, try to set up events where everyone pitches in for food, drinks, and entertainment (think potlucks, board games, or stream movie nights). As much as you can, try to eat in and make food on your own.

There’s so many ways you can save money — and you may even find a new hobby or passion while you’re doing it.

This article is part one of a two-part series —  stay tuned for the next article, where we’ll explore credit cards and online security.

Author: Nelnet Campus Commerce

View all posts by Nelnet Campus Commerce