You do not have to be a finance major or an accountant to make a budget, you just need to keep track of income and expenses. Learning to budget is a key to having good financial management and financial success. In budgeting, you need two things: an income and basic expenses. And who doesn’t have expenses?

Before we dive into tracking your money, take out your pay stubs to see your income, create a list of expenses, and then take out your calculator. Next, add up all of your monthly income and your monthly expenses to see how much you have coming in and going out. Your expenses can then be divided into fixed and variable expenses. Fixed expenses are the expenses that stay the same every month, such as rent or mortgage, car insurance, car payments, student loan payments, and utilities. Variable expenses include groceries, dining out, entertainment, personal care, and transportation, which can change from month to month. 

What is budgeting? 

          According to the Oxford Learner’s Dictionaries, budgeting is the process of planning to spend money for a particular purpose, and being careful with the amount of money you spend. In a nutshell, it is assigning a job to every dollar you earn.

It is normal to have some anxiety about budgeting because there is no one- size-fits-all approach to spending and saving. Figuring out what type of budgeting strategy works best for you takes some time, and that is okay. You can try different methods throughout the year to see which one works best for your lifestyle. College students have the opportunity to get familiar with budgeting, which can lead to long term financial stability.

          Proportional, zero-based, automatic and envelope are some examples of budgeting styles. 

With proportional budgeting, you divide your spending into categories based on percentage, and then try to stick to that percentage. This provides direction for your spending or savings goals and helps you look at the big picture of where your income is going. A common example of proportional budgeting is 50% for needs (rent, groceries, and utilities), 30% for wants (entertainment and dining out), and 20% for savings and paying off debt. Proportional budgeting is not written in stone, so you can change the percentages as your situation changes. For example, if you want to save more for an emergency fund and downpayment on a house, then you can use 50% of your income for fixed expenses, 25% for variable expenses and 25% for savings and debt payoff. 

Zero-based budgeting is when every dollar you spend has a predetermined use, meaning you plan ahead of time. With a zero-based budget, you start at zero, and then add up how much money you will need to cover your expenses for a set period of time, including any savings goals. You can prioritize to ensure that you have sufficient income to cover the most important expenses. Zero-based budgeting normally works well for individuals with fluctuating incomes, such as students, service-industry employees, and freelancers.

Automatic budgeting is known as a set-it-and-forget-it style of budgeting. It relies on pre-planning to set up automatic deposits and bill payments. You can use an app or set up automatic withdrawals from your bank account for fixed and variable expenses. This is a good way to save up emergency funds and increase savings by adding automatic transfers to your savings account from each paycheck.  Automatic budgeting requires careful pre-planning to make sure income is sufficient to cover automatic withdrawals and bill payments, and is not a good method of budgeting for people who do not have an extra cushion of money. Without a cushion, you risk accumulating overdraft fees if your bank account is overdrawn due to automatic payments.  

          The last budgeting style can be a hassle, but it is beneficial for knowing where you are spending your money. Envelope budgeting is when you physically take the money out of your bank account and place it in an envelope. This eliminates using a debit or credit card and helps to prevent overspending. The envelopes are labeled with expenses like rent, car payment, groceries, entertainment, and utilities. Every month you put the amount of cash needed in the envelope for each of the categories you have created, and then use the funds until they are exhausted. This type of budgeting works well for visual individuals. The benefits are preventing overdraft fees and overspending. 

          As long as you track your income and expenses, it does not matter if you choose proportional, zero-based, automatic or envelope budgeting. Be sure to make a realistic plan that works for you. 

I have included a QR code link for an iGRAD budgeting worksheet. There are also mini budgeting courses you can take at These resources are free to students, alumni, and faculty members if you make an account on iGrad.


Budgeting. budgeting noun – Definition, pictures, pronunciation and usage notes | Oxford Advanced Learner’s Dictionary at (n.d.). Retrieved February 21, 2023, from  


Federal Student Aid. (2023). Retrieved February 14, 2023, from 

Mossuto, J. (2022, November 11). Igrad. iGrad. Retrieved February 21, 2023, from 

Make a budget – consumer. (2023). Retrieved February 14, 2023, from


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