Being a graduating senior can be scary, but with this series, it doesn’t have to be.

By now, probably every JCU student has heard this advice at one time or another: “budget your money.” It is a skill that is beneficial to have and one that is especially important as graduating seniors move into the world of “adult” jobs that come with “real” salaries. However, though budgeting is encouraged, sometimes how to actually do it gets lost in translation. 

Before strategies for budgeting can be given, it is first important to define the term. Kimberly Murphy, a JCU professor who teaches retirement planning and personal financial literacy and  is the co-owner and director of financial planning of Park Edge Advisors, defines budgeting as the following: “Tracking your inflows and outflows. So, tracking your income… and all of your expenses and then really looking at those expenses in terms of what is variable and what is fixed.”

Fixed expenses include things like rent and car payments—things that stay consistent across time. Variable expenses include things like food, going out and clothing. For young people, budgeting can be focused on variable expenses. One can take their salary and subtract the fixed expenses immediately to harbor them for payments. Then, with the remaining money, one can allocate it to variable expenses in an amount that feels comfortable for them. This allocation of money is where budgeting comes in. 

Murphy argues that budgeting is especially important for young people to do because of the presence of online banking. “We really don’t know what we have coming in versus going out. We need to keep track of what’s coming in and what’s going out so we know whether or not at the end of every week or month, whether we have a deficit or a surplus.”

Looking at how to actually budget, Murphy explained that the best strategy for budgeting is to do what works for you. “There’s lots of different ways to budget. You could use a notepad and write everything down, you could use an Excel spreadsheet, you could use an app like Yodlee or YNAB or you could buy something like Quicken that really does more than budgeting for you.”

Some other resources for budgeting include Bankrate, which has lots of general financial information, and The Motley Fool, which has beginner friendly information. Others include Kiplinger and Investopedia.

For some final thoughts, Murphy shared that the real key to budgeting is to “find a method that works for you and stick with it.” 

While this article is not the end-all-be-all resource for budgeting, hopefully it can act as a resource in some capacity and begin to take the “scaries” out of budgeting.