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How to make a budget for the new year

Winter break is almost here. But before you know it, you’ll be back on campus for another round of lectures, late nights in the library, and trying not to stress over assignments. Between tuition, textbooks, food, and all the other expenses that come with student life, your bank account might be feeling pretty empty right about now.

Fortunately, there’s a simple budgeting method that can help you manage finances and save for what matters most.

First things first — what’s a budget?

A budget is a financial baseline. It’s how you track where all your money is going each month. It also helps you focus on what’s important versus where you’re just wasting money.

Budget how-tos

Budgeting before you spend could keep more cash in your wallet. But for a budget to work, you have to be honest about where your dollars are going each month. So, to make your first budget, bring up your last couple of pay stubs, whether they’re from a side gig or an on-campus job. Note the net pay, that’s the amount you take home after taxes.

Then go through your receipts or bank statements from the past couple of months and list out all the places money was flowing — tuition, rent, food, going out, whatever.


Now that you know how much money is coming in and where it’s been going, here’s a simple way to manage your earnings — it’s called the 50/30/20 budgeting method. It breaks down to 50% for needs, 30% for wants, and 20% for savings. Here’s what it might look like in real life.

50% of your paycheck is for all your must-pay bills.


  • Housing (dorm or apartment)
  • Tuition and fees
  • Books for classes
  • Food and clothing
  • Affordable transportation to and from campus

30% is for fun stuff.


  • Going out
  • Shopping
  • Spring break
  • Streaming services

20% gets stashed away into savings.

  • Earmarking a percentage of your income up front makes it easier to grow your savings balance. Set an initial savings target equal to three months of living expenses. Eventually, aim for a financial cushion that amounts to six months of expenses. BTW, if you’re carrying debt, prioritize paying that down first before the savings part.

People praise this method since it makes it easy to live within your means and save money without thinking too much about it.

How do I track all of this?

Now, you might have a longer list of spending categories. That’s all right. Digital budgeting apps like You Need a Budget and PocketGuard can help simplify the process. As you start plugging in your regular bills, you might notice your cash flow looking tight. No worries — it just means it’s time to find ways to low-key save some dough each month.

First, look for simple cuts you won’t feel, like streaming subscriptions you never use or switching to a data plan that better aligns with your usage. Track expenses for a month, then reevaluate. You’ve got this! Small changes add up to big savings in no time. At a minimum, take advantage of student discounts to save on entertainment.

If you’re still nowhere near balancing that budget, then you may need to think about downsizing your apartment to a cheaper place or getting a roommate.

Don’t stress too much — lots of us struggle when we’re first living on our own.

What’s the catch?

There’s no catch. You work the budget, and the budget will work for you. Just be sure to focus on needs over wants.

But here’s something you need to know. Foolproof budgeting does not exist. Your phone breaks, your car needs a fix … life happens and guess what? Sometimes these things aren’t in the budget! So, you’ve got to plan for the unplanned. That’s where savings come in. When — not if — you have a financial emergency, dip into your savings to cover it instead of using a high-interest-rate credit card to pay expenses.

There are your tools to get your money right for the new year. Creating a budget is totally doable, even if money management has never been your strong suit. Every budget gets better with time and practice. Now get out there and crush 2024 with a spending plan that puts you in charge of your finances.

Need a place to deposit your paycheck that makes paying bills easy? Open a Commerce Free Checking Account. You can connect the account to your favorite digital wallet, view transactions in the Commerce Bank Mobile app, and get free Commerce ATM transactions with your Visa® debit card. Customers who also download the Commerce Bank CONNECT® app can get answers to their banking questions 24 hours a day.

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