Making a Budget


Many of the people I see in therapy have depression and anxiety.  As I talk with them, basic things come up, including finances, relationships and the future.  I have often thought that basic finances should be taught in high school.  Everyone should know how to balance a check book, write a check, call for appointments, and set up utilities.  I don’t remember anyone teaching me any of those things in school, and I don’t remember my parents really doing it either, but I remember watching my mom write checks.  Learning how to do the basics is important, and building a budget is the first step.


If you ask many college students to set up a budget, I would predict that not many would be able to set up a realistic budget that they could manage with their first job out of school.  The first think about setting up a budget is writing down expenses.  From utilities, to car insurance, to rent and groceries need to be listed, along with a “slush fund”, to handle whatever comes up.  One of the things that people don’t think about is savings.  That needs to be listed as well.  A budget that includes money into savings every month is a budget that can work.  You can’t build a budget that is short every month, thinking that putting anything extra on credit cards  will be okay and you can catch up.  That never works.

Once you have everything listed, sort them out into categories.  When it comes to rent, electric, water, and gas (if you heat with gas), those should go into the “these must to be paid” category.  When it comes to cell phone bill, cable, internet, and house phone, put those in the “keep up with these” citatory.  These things are nice to have, but eating and having a roof over your head need to take priority.  Then work on a category for “important things”, like car payment, car insurance, and gas.  Create a grocery category, because everyone needs food, toilet paper, and light bulbs.  Next set up a savings category.   After that, create a fun citatory.  Fun can be going out to eat, going to the movies, or other things that help make working worth while.

When you have all your categories, write down your income and start dividing it up, starting with “these must be paid” and ending with fun.   The idea is to take out the most important bills first and making your fun category with whatever is left over.  I must admit that when most people do this, there isn’t much left for fun.   So many people these days end up in credit card debt because they don’t have enough left over for fun, but go out and have fun anyway.  I would guess that if people were really living within a budget, our economy would reflect more about what’s really happening in the middle class in our country.  Don’t be concerned if you don’t have much left over.  Take that information and do more things that don’t cost any money.  There are lots of things to do, and you can still have fun.

Making a budget is hard, and you have to be organized, but it’s worth it to really know where you are, financially, and where you are going.  It is so important to know where your money is going, so you don’t end up drowning in debt.  Live on your salary, save money, and be happy for life.