Budgeting 101

Budgeting is in an incredibly valuable skill to pick up, and a basic understanding can go a long way.

If you know your salary or stipend, it’s a good idea to budget to set realistic expectations for yourself. Or if you’re trying to negotiate an annual salary, it’s also a good idea – not to share your budget with employers, but to translate what an annual salary breaks down to each month.

Getting Started

Financial Wellness @ Penn aims to empower students and provide them with the tools they need to improve their financial health and literacy.

They have financial wellness toolkits and templates, a step-by-step How To Get Started budgeting guide, Budgeting Essentials, and much more.

Recommended Budgeting Calculators:

Recommended Budgeting Apps:

Gathering Information

Are there any financial statements or paperwork that would help? Gather up any information you have about your income and/or expenses. Utility bills, credit card bills, bank statements, etc.

Expenses: Needs vs Wants

Start by figuring out ballpark, approximate expenses. Expenses fall into 2 categories – Needs and Wants. You get to decide which expenses are needs and which are wants based on your personal and financial priorities. After you’ve fulfilled your needs, you should feel empowered to purchase your wants based on your priorities and financial abilities.

From there, expenses can be broken into two further categories: fixed and variable expenses. From SRFS:

Fixed expenses are expenses you incur on a regular basis and typically of a pre-determined amount. Some fixed expenses (like gas, electric, and credit card bills) may fluctuate from month to month based on your usage, but should be relatively predictable. Other fixed expenses (like rent, loan payments, and subscriptions) tend to be constant. Variable expenses are expenses that fluctuate depending on your spending behavior. Some examples include groceries, clothing, and entertainment.”

Categories usually include things like:

  1. Housing/rent
    1. Note: If you’re not sure, consider looking at some housing sites (this slide deck includes specific sites) to get a sense of what you might pay in rent, as it’s usually your biggest expense and is heavily dependent on location/size/roommates/etc. If you’re not sure, give yourself an estimate/range.
  2. Utilities (electric/water/gas – sometimes included in rent)
  3. Groceries/food
  4. Transportation (gas, car insurance, bus/subway, etc.)
  5. Internet/phone
  6. Personal care/clothes
  7. Entertainment, subscriptions/monthly services, etc.
  8. Debts/loans
  9. Savings/401(k)
  10. Remember that a portion of your paycheck will go to things like taxes, healthcare, etc. When you don’t know specifics, try to give yourself an estimate/range.
    1. Note: SmartAsset’s Federal Tax Calculator is a tool that calculates federal taxes.

Adjust the categories to match your own needs and priorities. For expenses that may fluctuate, give yourself an estimate or range – you can always adjust later.

Related Resources: Researching Salaries

For those trying to get a sense of salaries by industry, job function, and location, sites like Glassdoor and LinkedIn Salary, or our Post-Grad Industry reports can help. The Research Salaries & Negotiate Offers page also has some additional resources on getting started.


If you need help with the process or are feeling overwhelmed, remember you can make an appointment or schedule a same-day drop-in!

By Emily Barrale
Emily Barrale Associate Director for Data Visualization, Analysis & Reporting