Joy CooperThis month our blog was written by Joy Cooper, First Year College Advisor at Nevada State University. Thank you to the financial aid department at Nevada State University for the helpful information provided for this blog.

Did you know that only 1/3 of Americans stick to a monthly household budget? Forming solid financial habits now can pave the way for future financial success. In celebration of Financial Literacy Month, let’s delve into the art of creating and maintaining a budget.

Getting Started

Perhaps you’ve heard of the 50/20/30 budgeting approach, which divides your budget into three distinct categories:

  1. Necessities (like rent or mortgage) should constitute 50% of your budget.
  2. Financial goals should make up 20% of your budget.
  3. Lifestyle Expenditures (such as entertainment or shopping) should make up 30% of your budget.

Identify your reasons for embarking on a budgeting journey. Understanding your ‘why’ can serve as a driving force to adhere to your budget. If you have long-term objectives, establish short-term milestones that propel you towards your ultimate goals. For instance, consider reducing or eliminating credit card usage where feasible.

Monitoring Your Progress

Choose a budgeting method that suits your style. Whether it’s crafting a personalized spreadsheet, buying a budget planner, or utilizing a financial app, find what works for you. Categorize your expenses and retain receipts to help with tracking.

Housing and Utilities

If you’re a renter or homeowner, housing expenses can eat up a significant portion of your budget—approximately 33%. Stay on top of your monthly payments, and if you own a home, monitor your interest rates to potentially save money over time.

Be mindful of energy consumption by switching off electronics when not in use to trim down utility bills.


Strive to keep transportation costs within or below 15% of your budget, including car payments, repairs, and upkeep. Find ways to minimize expenses, whether it’s purchasing a more budget-friendly vehicle, shopping around for affordable insurance, or carpooling with a friend.


Plan meals for the week, create a grocery list, and stick to it while shopping. Cut back on ordering delivery or takeout by packing your lunch to save money.


Health insurance can mitigate overall medical costs. Set aside funds for monthly premiums, deductibles, copayments, and out-of-pocket expenditures.


While fun is essential, it can be costly! Financial advisors recommend allocating 30% of your income to lifestyle expenses. Exercise restraint when indulging in leisure activities. Occasionally opting for a cozy night in can be beneficial for both your budget and well-being.


Adopt a realistic approach to clothing purchases. Resist impulsive buying urges! Implement a 24-hour cooling-off period before making decisions. Assess your wardrobe and explore ways to revamp old pieces.


When seeking student loans, federal loans generally offer more favorable terms than private loans. Prioritize paying down student loans to avoid accruing interest and late fees.

Preparing for the Unexpected

Establishing a financial safety net is crucial in case of emergencies. Initiate the process by setting aside a fixed amount every four weeks. Typically, aim to accumulate savings equivalent to 3-6 months’ worth of living expenses.

Additional Advice

Whenever possible, refrain from paying full price. Hunt for coupons, promo codes, sales, and exclusive deals. Embrace the envelope system, where you only pay with cash. This method fosters mindfulness about expenditures compared to debit or credit card transactions.

Final Thoughts

While some budgeting tips may not align with your current lifestyle, it’s never too early to plan for the future. Reflect on ways to integrate these strategies into your life and how they can guide you towards your financial goals.