Saving and Budgeting

Step 1: Identify and evaluate how you currently spend your money.

• Do you make impulse purchases?

• Do you spend more than you make?

• Do you have costly habits?

Step 2: Within the constraints of your annual income, set short-term and long-term financial goals and determine how much you can allocate to each of the following:

• Expenses (e.g., Housing, transportation, food, entertainment, personal health, debt payments)

• Savings (e.g., emergency fund, retirement)

Step 3: Track spending to make sure you are meeting your goals.

• You may want to use budgeting software or online services to help automate some of your tracking.

If your student loan payment is greater than 10 or 15 percent of your income, contact MOHELA to explore a different repayment option.

As you get more comfortable monitoring your expenses, you may need to modify your budget. For example, if your income isn’t keeping up with your expenses and savings goals, some of your goals may be unrealistic and you may need to take action to slash your expenses.

You may be able to reduce expenses by doing some of these:

• Set your thermostat lower or higher depending on the season

• Turn off lights when you leave a room

• Reduce your cable services

• Brown-bag your lunch

• Don’t smoke

• Reduce your alcohol consumption

• Use coupons

• Entertain on a budget (rent movies, invite friends over for a potluck, visit free local attractions)

• Take advantage of early bird and happy hour specials

• Make homemade gifts

• 360 Degrees of Financial Literacy   this link will open in a new window – Helps Americans understand their personal finances and develop money management skills throughout their lives

• AmericaSaves.org   this link will open in a new window – Free financial tools, savings advice and resources to help you take charge of your finances and manage your money more effectively

• Bankrate.com   this link will open in a new window – Resources and calculators for a broad range of financial topics including Mortgages, Bank Accounts, Credit Cards, Insurance, Auto, Investments, Taxes, Retirement and Financial Planning

• Federal Reserve Bank of St. Louis   this link will open in a new window – Classroom resources for educators to use to teach about money and banking, economics, personal finance and the Federal Reserve

• Feed the Pig®   this link will open in a new window - Tools, articles and tips to help you on your path to financial stability by reducing your debt and growing your savings

• Navigating Your Financial Future   this link will open in a new window – Provides a variety of budgeting and financial resources for students and their families as they plan for life after college

• Spendster.org   this link will open in a new window – Tools to help you make decisions about how you spend and save your money – Quizzes, calculators, smart money guides, worksheets, budget wizard, and more