6 Steps to Building Your First BudgetBy First IB on July 11, 2016
After graduating from college, there are a lot of things that change. Many recent grads will search for their first full-time job, sign a lease for their first apartment, and incur additional expenses involved with joining the “real world.” It can be challenging to keep track of all monthly finances, which is why First IB recommends developing a budget to help you better manage your money. Below are a few tips for getting started!
- Follow the 50-30-20 rule of budgeting. Dedicate 50% of your monthly income to needs, 30% to wants, and save the remaining 20%.
- Figure out your monthly income. List each source that will provide an income, and figure out how much money you will receive from each of those sources. This will give you an idea of how much money you can afford to spend each month. (But just because you have it available, doesn’t mean you should spend it all!)
- Identify your fixed expenses. These will be the expenses that don’t change from month to month. This typically includes expenses like rent, utilities, a car payment and student loans, of course. Consider making a fixed monthly “savings” expense so you are always saving money in case of a financial emergency.
- Look at new expenses that arise after graduation. There are some expenses that may not have been a factor in college, but are now relevant. These may range from the cost of food or transportation, to the cost of insurance.
- List your variable expenses. You typically have some control over the items in this category. These are expenses that can be adjusted as your income changes: the cost of entertainment, dining out, furnishing your home or apartment, or traveling.
- Find an app that suits your needs. With the technology available in today’s society, there are a number of apps – such as Mint, You Need a Budget, or Pocket Guard – that can help you build a budget. First IB offers FinanceWorks to help you view and track balances from all of your accounts in one place. Or take a look at a few others to see which will help you begin the process, and stay on track.
As always, First IB is looking out for your financial wellness. Feel free to call us toll-free at 1-888-873-3424 with any questions.