Make a Budget

There's an old proverb that says: She who fails to plan, plans to fail. If you're not taking control of your financial situation, you're good as poor. Do you think broke lottery winners make budgets? Today we'll learn to make a budget so we can be confident about our finances.

My financial situation is a bit simple. I only have 1 real expense: student loans. Tonight I just made a payment to kill my highest interest rate loan (yay!). A sound financial tip: If you have some monies stored offshore in a Swiss bank and are collecting minimal interest, think about putting these funds toward paying off some loans which are accumulating more than minimal interest.

The rest of my money gets saved and some of it ends up in my belly. If I set a $150 budget per month on entertainment and purchases every month, I could meet it without a hitch. Since I'm leaving the country soon, I do have a few big ticket items to purchase: a MP3 player, an external hard drive, and maybe some hiking boots. Nothing crazy. President's weekend is great for electronics and I'm willing to wait. If I do decide to get hiking boots, I'll make sure to get a Peace Corps discount before hand.

A reader saw that I'd be making a budget today and asked for help. This is what I was given:

Please make me a budget  

my monthly expenses: 
transportation - gas 2 times a month, T tickets 
food for lunch/dinner at school
fun times - going out, movie night
miscellaneous - manicures, i can try to cut back on my clothes shopping

i have a limited (read: nonexistent) income. I only want to spend $500 a month. Is that doable? Realistically?


Dear faithful reader, of course it's doable and very realistic. The goal is to spend $500 or less a month and put some money away. Another tip is to pay yourself first AKA save money. If you can save 10% of your money you'll be ahead of most of your peers. If you're ambitious, shoot for 15% or maybe even 20%. Let's put $50 aside for saving. 


Transportation: $100 a month for gas, $20 for T tickets - $120.


Food for school lunch and dinner can be kept to a minimal by packing lunch and making your own dinner. Let's say 40 bucks a week - $160 a month. 


Extracurriculars and Night Life: $30 a week - $120 a month.


Miscellaneous/Purchases is the remaining - $50 a month. This overflow can be used as deemed necessary by you.


There you have it:

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