How to Create and Maintain a Budget. Staying financially fit during an economic downturn is vital--especially for recent college graduates or anyone else just entering the work world. Here are some tips to create and maintain a budget.
Devise a budget. While following a budget after school sounds like more work, it's vital to ensure that you stay on track of finances after college. With loans to pay and probably not much income coming in, a budget gives you a good idea of where you stand. Even if you scratch down your monthly bills and expenditures on a piece of paper, you'll still see where you need to put your money and where you can cut back spending. Many recent college graduates are intimidated by making a budget-the truth is that you don't have to keep track of everything using the latest financial software-something simple will do.
Review your budget regularly. The budget won't work unless you repeatedly review it. For example, if you're not making your minimum credit card payment month after month, there's a problem, so you'll need to see where you can take money from to make the payment. Looking at the budget helps you remember where funds need to be allocated so you don't wind up doing something like getting extra money one month and blowing it all on something frivolous because you think you have "extra" spending cash. Even if you're a savvy spender, knowing what your expenses are will help you be more aware of your financial status.
Adjust your budget as necessary. The great thing about a budget is that it can be amended. For example, if you're just out of school, you may not be paying off student loans for the first six months-but when that payment is added to your expenditures, it can hurt! So you'll need to constantly reevaluate where money is coming and going. Think of your budget as a living document-you have the power to revise it at any time and doing so can keep you on top of finances. You're in control of your financial future when you take time to become aware of it.
Integrate your budget into your long-term goals. There will come a time when you're not just getting by and you'll want to think about what you want out of things on a long-term basis. If you're planning on getting a promotion next year, don't spend that money as if you already have it; instead, plan to use the extra money when you get it to pay off something like credit card debt, which usually has a higher interest rate than school loans and isn't tax-deductible. Are you getting married soon or getting your own apartment? Once you get on your feet, you can plan on starting a separate fund and putting money towards things you want.
Kristen Fischer is a copywriter and author living in New Jersey. Her books Creatively Self-Employed: How Writers and Artists Deal with Career Ups and Downs and Ramen Noodles Rent and Resumes: An After-College Guide to Life, are currently available. For more information, visit http://www.kristenfischer.com, http://www.creativelyselfemployed.com or http://www.ramenrentresumes.com.