Creating a monthly spending plan or budget may not sound very exciting, but it is a vital first step in getting your finances in order. A spending plan will help you identify your income and expenditures. It will also help you understand how much money you have, where its going and help you identify areas where you can create savings.

Follow these steps to create your personal spending plan. You can use these worksheets to help you:

Budgeting for Working Professionals || Budgeting for Students

For professionals:

To create your initial spending plan, you can use the Monthly Budgeting Worksheet or create your own spreadsheet in Excel or another spreadsheet program.

Determine your Sources of Income
Determine what income you receive monthly. If you have a fixed monthly or biweekly paycheck, this should be easy. Use your take-home or net income (income after taxes and benefits are deducted).

Determine your Expenses
Calculate your monthly expenses: rent/mortgage, utilities, groceries, credit card payments, student loan payments, etc.

  • You can look through your expenses from a previous month or two, if you have records of them (receipts, credit card statements, check book entries, etc)
  • If you don’t have a record of your monthly expenses, make one. Track your spending for a month and record it. You can track your spending in a number of ways: on paper, using a spreadsheet of financial software such as Quicken, or using online budgeting tools such as: Mint.com, BudgetSimple.com or MySpendingPlan.com.
  • If you have costs that you incur every couple of months or once per year (insurance, car registration, etc), break them down into a per month amount so that you can include them in your monthly budget.

Total your Monthly Income and Expenses
Add together all of your income and all of your expenses.

  • If your income is greater than your expenses, great! You can use the extra income to help you reach your financial goals: pay off your credit cards or student loans, save for a large purchase or vacation, put away into an emergency fund, or save for retirement.
  • If your expenses are greater than your income, you will need to identify areas where you can save money. Cutting spending can be difficult, you should cover your “needs” first and your “wants” second. If your expenses exceed your income, you should start with reducing the amount you spend on “luxury” items, such as: eating out, entertainment, cable, etc.

Monitor your Budget Monthly
Make sure that you stick to the budget that you’ve created! At the end of the month, review your actual expenses against what you budgeted. This will let you know where you did well and where you need to improve.

For students:

To create your initial spending plan, you can use the Student Budgeting Worksheet or create your own spreadsheet in Excel or another spreadsheet program.

Determine your Sources of Income

  • Determine the amount of money available from savings and other resources.
  • Calculate how much you are receiving in financial aid. Be sure to subtract loan origination fees from the gross amount of loans you are borrowing (Stafford loans fees: 1%, Graduate PLUS loan fees: 4%)
  • If you have income from work, include that as well

Determine your Expenses

  • Calculate your tuition and fees for the term. For the 2013-14 year, fees are:
    • Tuition = $1357/credit hour
    • Technology Fee = $4/credit hour
    • Bus Pass Fee = $60/semester
    • Health and Counseling Fee = $234/semester
    • Health Insurance = $1,210/semester
    • First-Year fees (SBA and LRAP) = $190 (charged first semester only)
  • Calculate your other monthly expenses: rent, utilities, phone, groceries, credit care payments etc.
    • You can look through your expenses for the previous couple months if you have records of them (credit card bills, receipts, etc); or,
    • If you don’t have a record of your monthly expenses, make one. Track your spending for a month and record it. You can track your spending in a number of ways: on paper, using a spreadsheet of financial software such as Quicken, or using online budgeting tools such as: Mint.com, BudgetSimple.com or MySpendingPlan.com.

Total your Monthly Income and Expenses
Add together all of your income and all of your expenses.

  • If your income is greater than your expenses, you can afford to reduce your borrowing. Reduce any private loans first, then PLUS loans, and then unsubsidized Direct Stafford loans.
  • If your expenses are greater than your income, you will need to identify areas where you can save money. Cutting spending can be difficult, you should cover your “needs” first and your “wants” second. If your expenses exceed your income, you should start with reducing the amount you spend on “luxury” items, such as: eating out, entertainment, cable, etc.

Monitor your Budget Monthly
Make sure that you stick to the budget that you’ve created! At the end of the month, review your actual expenses against what you budgeted. This will let you know where you did well and where you need to improve.