### Budget Making 101

Now that you know why a budget is important and enough fancy money management terms, it is time to start making that budget.

First, figure out your monthly income (money that you have coming in). Look at your paystubs from work, check your Venmo to see how much you're paid from that tutoring job each month, or ask your parents what your allowance is.

Next, we need to set aside money for savings. You want to save as much as possible, but it is good to start with about ten percent of your income. Remember how to find percentages? Take your income and move the decimal over one spot to the left. (Example: 10% of \$50 is \$5.) We like to think of this as a fixed expense, but in a different category because it doesn't necessarily go to anything right away. We will talk about why we have this savings account later. Just understand it is so important because you're paying yourself in the future (the BEST thing you can do right now to set yourself up for success!).

Then, figure out what your fixed expenses are. Remember that fixed expenses stay the same. These are likely the things you NEED to pay every month and the amount doesn't change (at least not by much). This could be your portion of the family phone bill, car insurance, you get the picture.

And last, but not least, figure out what your flexible expenses are. These are things you pay for, but the amount and frequency can change. This is stuff like money for clothing, gas for your car, food, movie nights, apps or video games.

Okay, so we're going to make up some numbers so you can see what this budget looks like:

Let's say your income is about \$200 per month. This is \$50/week from your neighborhood dog-walking business. (If you have a legit job with taxes and everything, the amount of money you bring in may be a little harder to calculate. We'll talk about taxes in a later section!)

Savings is 10% of that, which equals \$20 per month.

Fixed Expenses: \$30 a month to parents for your phone. \$25 a month to your parents for car insurance. \$30+\$35= \$65 for fixed expenses.

Income - Savings - Fixed Expenses = Amount available for Flexible Expenses

\$200 - \$20 - \$65 = \$115

Great! Now you know how much money you have left over for the flexible and fun stuff! Good work. Once you understand how much wiggle room you have, you can figure out how much money you can allocate to each category in your flexible expense category.

Remember to pay in this order: Savings. Fixed. Flexible. Now repeat that in your head 100 times. Make up a song if you have to! (Or even a dance, we won't judge.)

While it seems like the order that you pay for this stuff doesn't matter, trust us, it does. Make sure to put your money into savings first so you're not tempted to spend it. Pay your future self first, every time! You'll thank your past self in the future. (Got it? Good.) Once your future is taken care of, make sure to cover those fixed expenses. You don't want to get caught at the end of the month and realize you spent \$45 on tacos and now don't have enough money to pay for gas. (True story. Don't ask.) Then all that glorious change leftover can be used to cover those flexible expenses in whatever you want. Go crazy... but like within your budget.