BUDGETING FOR THE SHORT AND LONG TERM

Once you have some practice with budgeting, start trying to project your expenses for a full year. You may not think of everything at first, but the more you do it, the easier it gets. Think about bills you only pay once in a while, such as car insurance and tuition. If you remember these in advance, you can plan better.

To get started, know your expenses. That's where writing down everything you buy will help (see Ways to Control your Spending).

Here's one way to get started tracking your expenses and budgeting your income. Try filling out the charts below. Plug in your income and sources. Also, plug in your expense categories and estimate their costs. Some common sources of income and expenses are suggested, but feel free to adjust the categories, figures, and expenditures. These charts were designed for a college student. If you're in high school, they can give you an idea of what to expect in college. You can also use them, leaving blank the categories that don't apply to you.

With a budget, you first see how much money you have (or will have, based on income from jobs, financial aid, and/or scholarships). List everything in these charts, and if a category doesn't apply to your situation, change it or go on to the next one.

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Next, think about how much money you'll need to pay bills and provide for yourself. These are your expenses. Again, be sure to list everything you can think of.

Now see what your income is versus your expenses. Subtract your total term expenses from your total term income. Then do the same thing with your annual totals. If the expenses are larger than the income, you'll need to figure out how to turn things around.

Turning it Around

There are two ways to change those expense to income ratios: cut expenses and/or increase your income.

Here are a few suggestions to help you curb your spending and increase your income:

• Look at your spending habits. Is there any way you can reduce your expenditures? Maybe you can keep soda in a dorm fridge instead of buying it from a vending machine at $1 a can. Better yet, try drinking water instead of soda—it's cheaper and healthier.
  
  
• Do you have things you no longer need that you could sell? College bulletin boards are great places to advertise an old bike, textbook, or furniture you want to unload. These things have the potential to put extra cash in your pocket.
  
  
• Do you really need to keep a car on campus? College parking fees can be hefty and the parking tickets even more so. You might get more financial mileage from walking or cycling.
  
  
• Investigate other grants or scholarships, even if you've already started school. Meet with a financial aid officer at your school to check out all your options.
  
  
• If you haven't found a part-time job yet, keep looking. Check with the financial aid or career services office to see if any on-campus jobs become available. Some colleges pay students for editing the school newspaper, serving as tour guides, or working as resident assistants in the dorms.
  
  
• Buy used textbooks. Most college bookstores sell used textbooks at a discount. Or surf the Internet for deals at online auction houses and bookstores.

Think of some ideas of your own and make a list for yourself.

Budgeting seems pretty simple, right? The reality is that few people ever budget. We've all been in the situation where we run out of money before our next paycheck comes. Then, we're in a pinch. Making a budget and sticking to it are the first steps to achieving any financial goal.