I have just started a new position after graduating college, and now I am getting an apartment. I've never actually had to manage things like this before, so this all seems a bit much for me to handle.

I'm looking for a little help into how I should best use my monthly earnings to to have a comfortable living.

As it stands my monthly income is around $3100, or $780 weekly. My share of rent is going to be around $470 - $500, including utilities. From there I need to budget transportation to work, be it park and ride, or simply driving and paying to park at a garage. I also have a car payment, and student loans to deal with.

What's the best way to form a budget so that I can live comfortably but save money.

Edit: Clarification on earnings, Monthly earnings range from $3120-$3900 per month, with an average of $3380.

Car payment is $220, and student loans are currently in grace period, but I believe I owe a staggering $99K

  • 1
    For budgeting, honesty is the best policy. Be honest with yourself about all of your expenses, be they recurring or discretionary. Research what your savings goals should be for your age and income (emergency fund, investments, attacking long-term debt, etc) and subtract these goals and known recurring expenses from your income.
    – ebwb
    Commented Aug 18, 2016 at 18:28
  • @RCarpenter When will your loan's grace period end, what is the interest rate, and what is the required monthly payment amount [can that amount be lowered based on financial need?]? Assuming 5% interest, that's about 10% of your take-home pay in interest alone... Commented Aug 18, 2016 at 20:16
  • I'm not 100% on the interest rate for the loan, I believe it might even be higher than that. Grace period ends in December.
    – Ranma344
    Commented Aug 18, 2016 at 20:27
  • 1
    @RCarpenter The first step in budgeting is gathering data - this includes the details of your outstanding financial obligations. You absolutely must determine the interest rate and payment plan required for your loan. Commented Aug 19, 2016 at 12:48
  • Is your rent about $500 per week or per month? If it's the first you should find another place ASAP. That would mean you're spending about 64% of your income on housing. There are a few different rules of thumb, but most places suggest around 30%.
    – David
    Commented Dec 6, 2016 at 4:32

5 Answers 5


Make a list of all your expenses. I use an Excel spreadsheet but you can do it on the back of a napkin if you prefer.

List fixed expenses, like rent, loan payments, insurance, etc.

I include giving to church and charity as fixed expenses, but of course that's up to you.

List regular but not fixed expenses, like food, heat and electricity, gas, etc. Come up with reasonable average or typical values for these. Keep records for at least a few months so you're not just guessing. (Though remember that some will vary with the season: presumably you spend a lot more on heat in the winter than in the summer, etc.)

You should budget to put something into savings and retirement. If you're young and just starting out, it's easy to decide to postpone retirement savings. But the sooner you start, the more the money will add up. Even if you can't put away a lot, try to put away SOMETHING. And if you budget for it, you should just get used to not having this money to play with.

Then total all this up and compare to your income. If the total is more than your income, you have a problem! You need to find a way to cut some expenses. I won't go any further with that thought -- that's another subject.

Hopefully you have some money left over after paying all the regular expenses. That's what you have to play with for entertainment and other non-essentials.

Make a schedule for paying your bills. I get paid twice a month, and so I pay most of my bills when I get a paycheck. I have some bills that I allocate to the first check of the month and some to the second, for others, whatever bills came in since my last check, I pay with the current check. I have it arranged so each check is big enough to pay all the bills that come from that check. If you can't do that, if you'll have a surplus from one check and a shortage from the next, then be sure to put money aside from the surplus check to cover the bills you'll pay at the next pay period.

Always pay your bills before you spend money on entertainment.

Always have a plan to pay your bills. Don't say, "oh, I'll come up with the money somehow".

If you have debt -- student loans, car loans, etc -- have a plan to pay it off. One of the most common traps people fall into is saying, "I really need to get out of debt. And I'm going to start paying off my debt. Next month, because this month I really want to buy this way cool toy." They put off getting out of debt until they have frittered away huge amounts of money on interest. Or worse, they keep accumulating new debt until they can't even pay the interest.

  • Whatever budget you make, stick to it, but keep in mind that situations change so don't beat yourself up if you have to break the budget or adjust it, e.g. when it turns out that you can't survive on $50 a week for food. Definitely budget retirement. Put it in, review quarterly, do not even consider early withdrawal. (I speak from experience). Also, budget luxuries. Entertainment, vacation savings, Christmas fund. If an app will help you stick to your budget, consider YNAB (you need a budget) or mint.com or some sort of budgeting software.
    – Xalorous
    Commented Aug 18, 2016 at 19:57
  • You don't say anything about building up an emergency fund. Your advice seems to encourage a safer form of living paycheck to paycheck. It would be stronger if you included building up a buffer so there is less immediate concern about where the current paycheck goes.
    – Eric
    Commented Aug 20, 2016 at 21:43
  • @eric I mentioned budgeting something for "savings" as a separate category from "retirement". Yes, I certainly could have emphasized this more: it's an important point.
    – Jay
    Commented Aug 21, 2016 at 4:51

Assuming the amount of your car payment and student loan aren't crazy you should be fine. I would suggest starting with a baseline budget listing your monthly income and expenses. Be sure to include miscellaneous expenses like car maintenance, insurance, food, clothes, etc (the common things that sometimes get overlooked in a budget).

After all of your necessary expenses (fluff like entertainment doesn't count), if your employer has a 401k with a match I would contribute to that up to the match amount.

Next I would save an emergency fund to cover unforseen events such as car repairs, etc. $1000 is not an uncommon amount to see people suggest for this.

Next I would knock out your car loan then student loan as fast as possible.

This will free up some cash flow which gives you more freedom to do what you want. At this point you save more so you don't have to finance the next car or have a down payment for a home or whatever. Building your savings to be 3-6 months of income is a good idea, this covers things like being laid off or other larger unexpected events.

After you get to that point how you handle your budget is pretty open.


Aside from the fundamental points brought up in other answers (which is important), there are a number of choices when it comes to budgeting software. Software like this can help you organize fixed reoccurring costs (rent and phone) as well as variable costs (food and events).

Mint is probably the most popular, but just search "budgeting software" to get an idea of what's out there. Some can also help you visualize your spending with reports and dashboards. Some help out with paying bills on a schedule (this may help avoiding late payments). Some even link up with your bank/credit card accounts.


The easiest way to get started on a budget is just to track where you spend your money. If you have set bills each month I would make a category for each of those to make sure you have enough to pay. You can try and split up the remaining income into categories but the easiest way to start is just to track your spending for a month or two. This gives you a birds eye view of what is actually realistic. Start with that total as your preliminary budget and then adjust as you go along to meet other financial goals. We use neobudget.com for tracking our income.


Does your employer offer direct deposit? Can you deposit to more than one account?

Personally, I have my pay split up like this via direct deposit:

  • staple monthly expenses deposited to checking account 1
  • general savings deposited to a regular savings account
  • another savings amount deposited to my brokerage account
  • the remainder and any reimbursements deposited to checking account 2

From an early age I found that separating my expenses from my spending money kept me inside my spending limits and kept my savings on track. In fact, checking account 1 and 2 are at two different banks.

Get yourself a credit card to start establishing some credit. Make a payment plan for the student loan, but before focusing completely on repaying it start to establish an emergency fund.

  • If your employer doesn't want to deposit into multiple accounts, but does offer direct deposit, consider opening a separate account just for the deposit, and set up transfers from it to wherever you prefer the money to go. Keep the balance at that account at zero (it's just a landing spot for the money, not somewhere you keep any of it).
    – user
    Commented Aug 20, 2016 at 16:28

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