Budgeting methods for students12/14/2023 ![]() ![]() Wants: 30 percentĪdulthood isn't only hard work and paying bills. Once that's in place, you might choose to save for a house or go back to school for an advanced degree. What to save for? First, build an emergency fund. That way, you're not tempted to spend it. The easiest way to keep saving every month is to set up an automatic transfer from your checking account to a savings account. Where do you see yourself in five years? Your savings are what will take you from here to there. What if you have more student loan debt than average, or if you graduated with a credit card balance on top of school loans? If that's the case, you're going to have to shave a few dollars off other categories until those debts are paid. The average monthly student loan payment is about $400. The 50/20/30 rule allocates 20 percent of your take-home pay for debt and savings.ĭebt (Student Loans): 13.5 percent, or about $400 If you watch your spending at the grocery store, you can save some of your food budget for eating out. of Agriculture publishes a monthly food plan which suggests how much money Americans should spend on food each month. Likely, you’re looking at a used car or possibly a lease. After paying for gas ( average of $80 - $100 a month depending on location) and insurance ( average $133 per month), you may have around $250 left to spend on car payments. But for most Americans, transportation means owning a car. In a big city, you might only need a subway pass. The average household in your income range spends 16 percent of their take-home pay getting around, according to the U.S. In more rural areas, chances are you can afford a one-bedroom apartment. If your new job is close to larger cities like Philadelphia or Baltimore, it may mean sharing an apartment with roommates and commuting. But in most markets, $700 a month will get you somewhere to sleep. This budget assumes that your healthcare costs are covered by insurance premiums taken out of your pay by your employer. You'll allocate most of that to housing, transportation, and food. In this sample budget, half your monthly paychecks amount to $1,500. Here's a look at your set-up costs through the lens of the 50/20/30 rule. ![]() Since beginning the next phase in your life, there are things you'll have to spend on right away. How much of that can you spend on each expense? The Consumer Financial Protection Bureau recommends the 50/20/30 rule: Spend half your take-home pay on needs, 20 percent on savings and paying off debt, and no more than 30 percent on things you want. Needs, Debts, Savings, and Wantsĭepending on what state you live in, gross income of $55,000 a year turns into take-home pay of around $3,000 per month. That's just about the average starting salary for the class of 2020. If you’ve graduated and are still on the job hunt, it’s even more critical to create and stick to a budget, and you’re not alone, more than 45% of 2020 graduates were still looking for work as of May 2021.īelow is a sample budget for a new graduate earning $55,000 a year. For too many new grads, spending outstrips new income, resulting in too much debt. If you are starting a new job, you may have more income than ever before - but also more expenses. Lots of things will be different after graduation, so it’s crucial to start with a budget that will transition with you. One day you're tossing your graduation cap in the air, and the next day, you’ve moved on to the next phase of your life. ![]()
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