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The Art of Budgeting

Paying for college, investing in stocks, and simply going shopping all have one thing in common: they require a budget. In order to spend money, one has to be aware of how often and how much they are spending. For college, paying student loans and other monthly fees requires scholars to be conscious of how much money they have, and how much they can spend before being in debt. However, before topics such as paying for college and investing in stocks are introduced, it is important to understand what budgeting is, why it is important, and how to bring it to fruition.

What is Budgeting and how does one Budget?

The act of budgeting has been misunderstood for years. Many believe that budgeting is used only by a specific “group” when in actuality it can be utilized by anyone—families, the government, teenagers, etc. Because many are unaware of what budgeting is and the simplicity of it, I have defined it in less complex terms: A budget is a plan for saving and spending. Unfortunately, money does not literally grow on trees and thus, it is imperative to understand that money is limited and if handled poorly, can lead to debt. The goal is to be debt free and pay off anything that has high interest as quickly as possible.

Investopedia has a seven step plan for budgeting that I have explained below using straightforward phrases. Also, keep in mind that a budget plan looks different for everyone based on their current financial situation and goals.

Step 1: Add up your total income. For example, if you have a job, add up the paychecks and tips that you receive. (Note: your income is not limited to your job earnings, investment income or disability income should also be added)

Step 2: Track your spending. Everything you spend money on—gas, shopping, monthly fees, etc—whether you use cash or card needs to be tracked and organized in a place where you can find it and clearly point out what your expenses are.

Step 3: Set financial goals. Do you want to pay off student loans? Save for a trip? Make these goals realistic and list them in order of importance.

Step 4: Calculate mandatory expenses. This is monthly expenses such as rent, taxes, childcare, or your phone bill. Subtract these from your total income.

Step 5: Do you have debt payments? If so, find the minimum payment for each debt. Subtract that from your income. This means that if you have $10,000 in student loans debt and your monthly payment is $100, you would subtract the $100 from your income per month.

Step 6: Make a spending plan. The amount of income left can be used on non mandatory expenses (ex: groceries or surprise expenses).

Step 7: Adjust each month. Your spending and goals may fluctuate, so don’t be afraid to adapt in order to avoid overspending.

Sticking to a Budget

Sticking to a budget can be hard, so it is important to remove the options that allow you to cheat on your budget. This means creating barriers that keep you from making impulse buys. Ask yourself, “Is this necessary?” If you want to go the extra mile, Investopedia recommends taking yourself off retailer email lists.

Also, find some support using resources such as online forums where others journey through the same road of budgeting. But remember, it’s important to reward yourself every now and then. After a month of successful budgeting, treat yourself with a reward because you’ve deserved it.

Ava Wieczorek

Grade 11



Ganti, Akhilesh. “What Is a Budget? Plus 10 Budgeting Myths Holding You Back.” Investopedia, Accessed 23 Sept 2023.

Rooster Money. “Talking About Budgeting.” Rooster Money,,you%20need%20to%20cut%20back. Accessed 23 Sept 2023.

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