Creating and Managing a Budget

Contrary to popular belief, budgets are not preventative measures to keep you from spending money. In fact, a budget is actually a spending plan that divides your income to cover your expenses and tracks how closely your actual spending lines up with what you planned to spend.

If a budget is too restrictive, you will be far less likely to stick with it. It's best to create a budget that balances your desire to reach your goals with the desire to be satisfied with the journey.

Creating a Budget

Prior to creating a budget, it's important to write down all of your expenses and each source of income you have during a given month, even if you may think they are small or uncommon. Once your expenses and income are listed, the next step is to separate your needs from your wants. If you aren't sure if something is a need or a want, do without it for a period of time. If after that time you truly can't live without it, it may be a need.

Below is a brief summary of some important steps to take before making a budget:

  • Understand your income - How much money are you taking in and from what sources?
  • Know and track your actual expenses and when they happen (rent, books, travel, etc.)
  • Organize your records (bank account, credit card statement, utility bills, etc.)
  • Talk about your plan to budget with everyone involved in paying for school
  • Plan for the future - Once you master your spending plan, start to include extra savings or paying off student loans as part of it

If you don't know where to start when creating a budget, try the 50-30-20 rule.

Outline of the 50-30-20 budget breakdown

Once you are ready to create your budget, check out the Resources section below for tools and templates to get started.

Budgeting For Food

Regularly eating out can be a significant financial drain, especially if the cost is not factored into your budget. Planning in advance and grocery shopping on a weekly or bi-weekly basis can be a healthy and efficient way to cut back on the amount of money you spend on food each month. Before going to the grocery store, consider these tips:

  • Plan out your meals for the week - try and plan meals around ingredients you already have
  • Make a list and stick to it
  • Use unit pricing to compare similar items
This image explains that it is over 300% more expensive to eat at a restaurant instead of cooking at home. Some tips to save money by not eating out are: Go out to dinner less often, take your lunch to work, make smarter decisions when eating out, eat less, and eat your leftovers.

Via: InvestmentZen.com

Cost of Living Expenses at UVA

Do you have questions about how your living arrangement (on-Grounds or off-Grounds) factors in to your financial aid offer? This is a common question asked by students as they decide where to live each year. The most simple explanation is that living arrangements do not affect the amount of financial aid you receive.

A student's Cost of Living allotment is based on factors such as housing, dining, books, etc., and is consistent for all students based on their in-state or out-of-state status. For example, the standard housing limit of $7,470 will not be increased if you live in an apartment or house that costs more than $7,470 annually. For more information, please visit our Personal Finance and the Student Lifecycle page. 

Resources

Budgeting Tools and Templates