Financial Literacy

Budgeting

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.

Budgeting Decisions

1. 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
2. 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

50/30/20 Rule

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 Guides

Other Budgeting Tools

Salary Research

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.