Broke Bank to Money Master: A College Student Guide to Budgeting

Budgeting can be tough, especially when you have work, academic, and social responsibilities to worry about. The hardest part is simply setting up your budget realistically – a poorly made budget is overly restrictive hard to follow, while a well made one works wonders. In this article, I’ll be going over how to make a budget that works.

This article also assumes that you are keeping track of every transaction you make, and this can be done automatically if you link your debit/credit cards to Mint and use those to pay for all of your transactions.

Step 1: Calculate Your Spending

This seems counter-intuitive at first, as many people base their budget on their income first. However, a teacher of mine in high school always recommended to the class that we should figure out our desired quality of, figure out how much it costs, then work backwards from there (figure out jobs that pay that much, then find a job within those fields that interest us, then major in what will get us that job). The same principle applies to budgets. Figure out how much you need to spend per month on necessities, how much you’d like to spend on fun, then figure out how much you have to work to make that happen.

I’ll use myself as an example. On a usual month, I spend around $250-$400, and I want to save around $500. We can call the $400 flexible spending, and the $500 necessary savings. If I had to pay rent, that $500 would be my rent contribution money instead. So, we’ve developed a spending level of about $900 per month, as it’s always safer to assume the high-end of how much you might spend when making a budget.

Step 2: Divide Your Spending Areas

You’ve figured out your total spending per month, but what do you spend it on? Divide between absolute necessities (food, (essential) clothes, any bills, etc) and leisure spending (going out, shopping, gaming, hobbies, etc). Subdivide into different areas as you want, and figure out which areas you could trim if you had to (regular Starbucks, going out to eat, excess clothes, etc). This step isn’t mandatory, but it greatly helps with knowing how you spend your money and figuring out what you need vs. want.

Some categories may dip into both need and want, such as food. You need to eat, but may want to go places that are out of your budget. Figure out how to differentiate your wants from your needs, especially when you argue that a “want” is a “need.” A restaurant is generally a want, while groceries are generally a need (unless you buy luxurious groceries). Be true to yourself, and be honest about what you need versus what you want.

Step 3: Make the Money You Need

This is much easier said than done, but some simple math can help you plot out how much work you need to do. Let’s say you have an entry-level job that pays $10 BEFORE tax. After tax, that hourly rate is closer to $8.80, depending on your state and employer. Let’s imagine you have $800 in expenses and spending per month as well.

Now, let’s do some math!

  1. Calculate your after-tax hourly rate by dividing your after-tax pay by your gross pay, then multiplying by your pre-tax hourly rate. All this information should be on your pay stub.
    • 20 hours at $10 an hour – gross pay is $200, after-tax pay is $176
      • $176 / $200 = .88
      • .88 x $10 = $8.80
    • You can simplify this by simply dividing your after-tax pay by hours worked, but finding the tax ratio is helpful for figuring out how much you might make at different hourly rates
      • $176 / 20 = $8.80
  2. Divide your total expenditures by your after-tax hourly rate to see how much you need to work per month, then figure out how many hours you need to work per week.
    • $800 / $8.80 = ~90.9 hours
      • 90.9 hours / 4 weeks = ~22.72 hours per week
  3. Get enough shifts to cover that much, and take a few extra if you need a safety net.

I write this assuming that your job has fairly flexible hours and allows you to get more shifts, but that isn’t the case for many people, and if that is the case, you may need to trim your spending (or pick up a second job). That can be anything from trimming spending areas you don’t consistently make purchases in, reducing excess spending, finding cheaper alternatives, utilizing discounts, or splitting some expenses with friends or roommates. This article is strictly about making a budget, so the trimming section will come later!

Because you’re basing your budget on how much you actually spend, rather than how much you think you ought to spend, it is much harder to fail. This type of budgeting is more like figuring out how much time you need to spend working in order to pay your expenses and provide you with the lifestyle you want to have. Sometimes, at the stage in your life you are, your job may not be able to support your desired lifestyle, in which case you have to reduce what’s unnecessary.

We’ve gone over how to make a budget today, and next article, I’ll talk about how to trim that budget effectively!

Best of luck,



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