Why You Should Start Budgeting Early

by AJ Pettersen · 8 comments

Being an economics major, I was well-prepared to handle my own finances. But budgeting wasn’t a walk in the part for me either, as I had to experiment before I found the right system. Don’t wait to experiment. Start tracking your dollars now. I didn’t have a lot to manage when I first started counting my dollars in college, but keeping track prepared me to handle more significant finances now. Like anything else in life, discipline is important. Keep budgeting high on your priority list and it will pay off in the future.

“But what if I don’t have much cash flow activity?”
This is all the more reason to start budgeting now. Learning how to budget early will make a big difference when you start to have more financial activity. The longer you wait, the more complex your financial life will be and the harder it is to get a budget going.

I was lucky enough to have an athletic scholarship to cover my tuition and my parents to cover my rent. I didn’t have a lot of income, but I did make a little bit here and there. I had average expenses for a college student, but nothing significant. Making a budget with the little that I had ensured that I met the goals I set. Though my goals were small, they were still important because they represented progress financially.

“And if I don’t have any future financial goals?”
Setting financial goals in younger years doesn’t have to mean preparing for retirement. Making small goals is just as important as the big ones you will make later in life. If you prepare yourself by making simple goals now, you will be better prepared for larger goals in the future. My goals in college were of this nature, like trying to save a little each month so I had enough to pay for Christmas, or ensuring that I had enough leftover to pay for the gas to go home and see my family. These smaller objectives have led to larger ones like paying off student loans with my fiancé, while still keeping a large enough savings account so we can put a down payment on a house someday.

So, where do I start?”
A good way to start budgeting is to take a look at your last bank statement. I track all of my spending through my online bank management account. Start by setting some goals for yourself. These can be as small as building your savings by x amount per month or as big as saving to buy a car. Make sure you set benchmarks to stay accountable to the process.

The next step is to split your expenses into categories and start tracking it each month. After a few months you will have a good idea of how much you spend in each category. You can then find categories where you can save. When I started doing this, I found I spent too much money eating out. This was an easy category to save on. Where can you reduce spending and save? Check in and make sure you are able to take care of necessary expenses, such as gas, school books and groceries. Keep an eye on your student loans as well. Developing a plan of when and how you will pay them will be important in the future.

Take control of your financial future now. Budgeting will prepare you for when you will need money management the most.

Not convinced? Here are 7 more reasons why you need to have a budget.

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{ read the comments below or add one }

  • Ross Smith says:

    It boggles my mind that some individuals still use ancient methods to track their monthly expenditures. I use Mint.com, and it has vastly improved my observation of where my money goes.

    • Kim says:

      Hey Ross, do you mean ancient as in a yellow legal pad and pencil? Because that’s what I use and it works great for me. LOL! Guess that’s cuz I’m old. LOL!

      • Ross Smith says:

        Exactly, Kim! I don’t think I would ever be successful if I had to manually track every, single purchase I made, especially since so many of my bills are automated and just take care of themselves. Mint.com automatically pulls all my transactions from my two credit cards, checks, debit card, student loans, mortgage, car loan, etc. into one central location. All I have to do is log in, wait a minute, and all my accounts are up to date. Simplicity!

  • Jean says:

    Yea, you can never start budgeting early enough. Always think many years ahead instead of living for the moment. You just never know what hardships you may face down the road and it’s always good to be prepared well in advance.


  • Marbella says:

    I studied business administration in higher education and in college and learned immediately how I budget my finances for restan of my life. I have never taken bank loans, no credit and no down payments. The sooner you learn to budget your finances, the better been your life.

  • Jeff Crews says:

    I have never really lived by a budget. However, I thought about starting one this month. Who knows? I might save something. I was planning on looking at my expenses over the month to see what areas I could lower my costs. Do you use any apps to budget?

    • AJ Pettersen says:


      There is a free Android app called Moneywise that I find fairly effective. Once my fiance and I got a joint bank account it was much harder to track all the spending with an app, so now I just use the online banking and put it into excel. I hope this is helpful,


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