A First-Generation Graduate's Guide to Start Budgeting
I grew up fascinated by money, but not for the reasons you might think. We didn't have much of it. As the first person in my family to go to college, I had to learn everything the hard way. That's why I want to share how I learned to budget. These habits changed my life, and they can change yours too.
Where Is My Money Going?
During my college years, I worked part-time, earning a few hundred dollars weekly. Like many students, I watched my money disappear into hanging out with friends, fast food, and daily expenses. Even worse, the $2,000 I had in my savings (a lot for me back then) vanished too. I knew something had to change. I had to take control of my finances.
The Power of a Budget
Creating a budget changed everything for me. I started with simple changes, like packing my lunch instead of buying food every day.
A budget isn't just a spreadsheet; it's a plan for how you want to spend your money. Think of it like giving each dollar a job. Some dollars go toward rent, some toward food, and some toward fun or other things.
It can feel boring or uncomfortable to control how you spend your money. But once you see the savings start to pile up, budgeting becomes fun. Whether you dream of saving for a house, retiring comfortably, or taking a special vacation, budgeting is how you get there.
Budgeting helped me do all of the above, and it can help you, too.
Your Step-by-Step Guide to Budgeting Success
Step 1: Figure Out How Much Money You Actually Have
Look at your paycheck - the amount that goes into your bank account is your starting point. If you have health insurance or retirement savings taken out automatically, add those back in. This shows you all the money you have to work with.
Step 2: Pick a Budget Plan
While there are many budgeting methods, I recommend starting with the straightforward 50/30/20 budget. Here's an example using a monthly after-tax income of $10,000:
50% for essential needs ($5,000 for housing, utilities, groceries)
30% for wants ($3,000 for entertainment, dining out, hobbies)
20% for savings and debt repayment ($2,000 to pay debt and save)
Step 3: Start Tracking Where Your Money Goes
Modern technology makes expense tracking nearly effortless. I use apps like Rocket Money or Empower to watch my spending. These tools connect to your bank account and tell you exactly where your money goes. They even tell you your net worth – everything you own minus everything you owe.
Step 4: Set Up Automatic Savings
This is my favorite hack: I set up my bank account to move money to savings as soon as I get paid. Or, I set up my direct deposit to automatically send money to my savings account. I don't even see the money in my checking account, so I'm not tempted to spend it. You'd be amazed how quickly your savings grow when you do this.
When the money moves automatically, you adapt your lifestyle to what's left over, and your wealth grows quietly in the background. Seeing your overall wealth increase with less effort feels great.
Step 5: Keep Going
At first, tracking your money might feel weird or uncomfortable. That's normal! I felt the same way. But after a few months, it becomes a habit. Now I always know how much money I have and where it's going.
Why This Works
When I started budgeting, my whole relationship with money changed. Budgeting works because it forces you to monitor your overall spending. It's too easy to spend until you have little or no money left in your checking account. Instead of wondering where your money is going, you now know where it's going and that some of it is being saved automatically.
Start Today
If you're like I was, watching your money disappear and feeling stuck, start budgeting today. Your future self will thank you.
[This article was written from personal experience as a first-generation college graduate who transformed their financial future through budgeting.]