Setting up a budget right out of college is easy—and smart

Making a budget is one of the most important things you can do to set yourself up for success. And post-college graduation is a great time to start so you can build good money habits and watch your nest egg — and financial security — grow.

“If you don’t understand what you have coming in and going out, there’s no way to have a clear plan for your finances,” explains Lauryn Williams, a certified financial planner and founder of Worth Winning , a company that provides financial guidance to young professionals. “You can calculate so many things and understand so much about what your financial goals are.”

And, setting up a budget is a lot simpler than you think.

The key components of your budget are:

Income : how much money you earn by working or through investments
Expenses :
– Fixed : any expense that is recurring and the amount largely stays the same (rent, utilities, loan payments, etc.)
– Variable : any expense that changes over time (gas, groceries, dining out, etc.)
Savings : what’s left over when you subtract your expenses from your income

See? Not too complicated.

Whether you just graduated or you’ll be graduating soon, here are a few tips to help you get started. What are your expenses?

First, you have to know what your expenses are — both fixed and variable.

Fixed expenses are easy to budget for since they are consistent costs.

It is “important to know your fixed costs going into each month,” said Mary-Katheryn Egger, an accounting and retail management major at Syracuse University. “This way you always have the funds to cover those costs and know what is left over.”

Mary-Katheryn Egger, a senior at Syracuse University majoring in accounting and retail management

Photo: Brian Camarao

Variable expenses are a little trickier, because they may recur but they don’t always and the amount fluctuates.

It can be hard to list out all the things you spend money on and how much you spend on each. If you’re unsure, an easy way to see your routine purchases is to look at past transactions.

“I like to utilize my old bank account statements as reference to what I’ve spent in the past, and what my income has looked like,” Egger explains.

Looking at your past statements is one of the easiest ways to see all your spending history in one spot. If you use a debit card, you should check your bank account statement, but a lot of credit cards also have some sort of a spending tool on their app that breaks down how much you’re spending and where (gas, restaurants, entertainment, etc.). This will definitely help you in determining what your expenses are and how much you should be budgeting for each.

More from College Voices : College Money 101: From student loans to setting up a budget Quick tips to help college students start saving money I want to move to New York after college graduation. Can I afford it? A good rule of thumb is to over-budget for your variable expenses and see what’s left over afterward rather than not having enough at the start. So, take a look at the past few months of your expenses. Figure out the average — say, if it’s three months, add it all up and divide by three. Then, add a little extra. Building and maintaining your budget There are a lot of ways to set up a budget, but one of the most common approaches is called the 50/30/20 rule. That means: 50% of your income goes to your needs, 30% to your wants, and 20% to your savings.Your needs and wants are essentially your expenses. Needs are the things you can’t live without, like rent and groceries, and wants are things such as eating out, going to a baseball game or getting your nails done. And, you want to make sure that you are leaving enough left over for savings — some for unexpected expenses that may come up and also long-term savings.CNBC Tools to help you stay on track There are a lot of tools out there that can actually make budgeting a lot easier.“I’m a big fan of technology giving us a lift to things that are boring and mundane,” said Douglas Boneparth, a certified financial planner and founder of financial services firm Bone Fide Wealth . Excel. Using an Excel budget sheet is one way to track your expenses. I found this free one online. It specifically breaks down costs not only by month but […]

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