A Budget Template for New Grads

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A budget can be overwhelming for new college graduates. It doesn't have to be. Here are 10 simple tips to help you start budgeting with little money today.

When you’re a new college grad, mistakes can make or break your financial success right off the bat. Setting up a budget (or a spending plan!) will get you on the right track. You don’t want to start off spending more than you earn only to end up living paycheck-to-paycheck, or worse, in debt.

However, it can be difficult to anticipate what expenses you should budget for if you’ve never lived on your own before, or if you had less expenses to worry about in college.

For example, even though I was tracking my expenses and income when I graduated, moving in with my then-boyfriend and figuring out a budget entailed a lot more than I thought it would. I don’t think I’m alone in my experience.

It’s easy to make financial mistakes in your 20s, but learning to manage your money wisely can make a difference. To help you out, here are some categories you should consider putting in your budget as a new grad, and how you can keep your expenses down.

1. Rent & Utilities


Rent is a big expense, regardless of whether you choose to move out of your parents’ house or live with roommates. You want to focus on keeping this expense as low as possible while still living comfortably.

Think of it this way – if 40 percent of your income is going toward rent and utilities, that doesn’t leave much room for anything else in your budget.

When I first moved out, I looked for places with utilities included in the rent. That made my life a lot easier when it came to budgeting, as I didn’t have to worry about what heating or cooling was going to cost me each month.

As you consider the expense of rent you’ll want to track your spending so you can stay on top of all your expenses. Tracking your spending sounds difficult, but it can be done quite easily with automation.

We recommend Tiller if you’re looking for a way to track your spending. Tiller lets you view all your financial transactions in one location. Tiller is a Google Sheets based service that automatically pulls all your banking and other financial transactions that helps you categorize your spending and find opportunities to save.

Tiller is free to use for the first month, then $5 per month thereafter.

2. Groceries


Groceries are likely going to be your second largest variable expense. You have to eat, right? Yes, but that doesn’t mean you have to spend a ton on food. You don’t want to go overboard at the store only to throw out items because they’ve gone bad.

Everyone’s appetite is different, but my fiance and I hover around $300 per month for groceries. If I were budgeting just for myself, I’d probably spend $75-$100 per month, only because my appetite is very small.

Quick tips to keep your grocery spending down: shop sales and stick to a list. Use a meal plan, buy whole foods instead of processed foods, buy in bulk if you have the space (we buy all our paper goods in bulk), and aim to make a trip once a week or less to limit the opportunity to spend.

Did you know you can get cash back on your grocery shopping? With Ibotta you can earn cash back from items you buy at the grocery store. After you’re done shopping you scan your receipt and Ibotta matches it against cheaper offers and pays you the difference.

Ibotta doesn’t just work at grocery stores, they also work with over 350 vendors. Ibotta connects to your PayPal or Venmo account so you can get paid right away. If you’d rather not scan receipts, you can use the Ibotta app on your phone to locate sales for the store you’re at.

Ibotta gives you a $10 bonus just for signing up!

3. Gas/Transportation


If you’re able to land a job before you move out, I recommend moving as close to work as possible to cut down on transportation costs. Rent may be higher depending on where you work, but if you can get by without a car (and minimal transportation), the savings could make up for the increase in rent. Besides that, sitting in traffic isn’t fun!

Can’t get anywhere without a car? Estimate how much you’ll spend in gas on your commute to work by using a trip cost calculator (Gasbuddy has one). Try and factor in any other errands you may run over the week, as well as any trips you want to take.

Only spending on public transportation? Figure out how much monthly passes are and add it into your budget.

4. Entertainment


Contrary to what some might think, it is possible to enjoy life while living on a budget; you can even treat yourself when you look for ways to save money on entertainment. This is a very broad category that encompasses a lot of “fun” expenses.

Maybe only one of these appeals to you as you’re a homebody, or maybe all of them apply! Depending on how detailed you want your budget to be, you can break entertainment down into these sub-categories:

You should have a general idea of what to include here from the suggestions above. It’s a good idea to leave this category for last when figuring out how much money you can allocate to it, as most of these expenses aren’t needs.

5. Insurance


This might be a “boring” category, but it’s a must to include if you have a renter’s insurance or car insurance payment due every month. Additionally, if you’re not covered by your parents’ health insurance, or you have any co-payments or exams you need to pay for out-of-pocket, it’s a good idea to budget for them.

Health insurance is obviously going to be the more expensive of the insurance needs.

Check rates at E-Health Insurance to find the lowest rates available so you can save as much as possible.

6. Phone Bill


I prefer to keep this separate from utilities since your phone isn’t exactly a “living expense” – you don’t just encounter it when you’re at home. It’s also probably one of the first bills you were responsible for paying yourself. As such, it can be easy to fall into the trap of thinking you have to spend $80+ per month for your service.

You don’t. Cheap cell phone plans do exist. MVNO’s like Cricket, Republic Wireless, Straight Talk and others mean paying as little as $15 per month if you’re on a Wi-Fi network constantly. Otherwise, 3G plans are around $25-$35 per month.

7. Student Loan Payments/Debt


This one is a given, but that doesn’t mean you should exclude it from your budget. You never want to be late on a payment, so it’s important to have the funds ready to cover your monthly debt payments. If at all possible, I recommend making extra payments on any loans you have to reduce how much you’ll pay in interest.

Do you have multiple loans, or high-interest rate loans? You may benefit from consolidating the loans so you only have one payment to make each month, and at a lower rate.

Check rates at SoFi to see how much you can save on payments.

Unfortunately, student loans aren’t the only debt you may have. If you have credit card debt, you want to pay those off as soon as possible. The best way to do that is to lower your rates and pay as much as you can each month.

Lenders like Avant and Lending Club can help you lower rates by as much as half, helping you pay off debt quicker.

8. Savings


You should budget in your savings, otherwise you might not actually save money. You probably think you’ll save whatever you have leftover at the end of the month, but you’re more likely to spend it. When you allocate all your money and give it a purpose, it’s harder for things to fall through the cracks.

Opening a savings account with an online bank, like Synchrony or Barclays Savings, allows you to earn some interest on your savings (currently at least 1.45% for Barclays and 1.55% for Synchrony) and set up automatic transfers from your paycheck so that you don’t miss (or misuse) your money. The best part is both have no minimum balance requirement to open an account.

Think about establishing an emergency fund where you can keep around three months of living expenses in case something happens. Create other financial goals for yourself, like paying off debt, or saving for a vacation, so your money continues to have a purpose.

9. Pet Expenses


If you’re a proud owner of a furry family member, you should absolutely budget for any pet-related expenses, such as food, litter, toys, behavioral classes, or medicine.

Remember how we were talking about savings? You need to take future veterinary expenses into account, too. None of us like to think about anything bad happening to our pets, but it’s better to be prepared for the expense with a dedicated pet savings fund.

10. One-Time Expenses


These are oddball expenses that tend to get forgotten, such as birthdays, car registration and inspection, speeding tickets, taxes, or annual memberships. Some of these can be planned for (holidays, special events), and for others, you might need to adjust your spending elsewhere to make room.

A budget can be overwhelming for new college graduates. It doesn't have to be. Here are 10 simple tips to help you start budgeting with little money today.

Optional: Occasional Splurges


This is useful for those on an extremely tight budget who think they might encounter saving or debt fatigue. There’s only so much we can cut back, and you never want to feel like you’re not allowed to have any fun in life.

For that reason, having an “occasional splurge” category is a good idea. If you have any money leftover after budgeting for everything else, even $10, consider letting yourself use it for a fun splurge. $10 can get you a few coffee trips, a new top, an ebook or a used video game. It’ll give you a purchase to look forward to – just make sure it’s a good one!

Budgeting Doesn’t Have to Be Restrictive, Just Spend Wisely


I want to make sure we’re clear here – budgeting, and being frugal, aren’t meant to be restrictive. Both actually give you more freedom. Budgets can be changed and adapted.

If you want to have more entertainment money one month, you can “borrow” from your grocery budget. Staying aware of your expenses is the biggest key to experiencing financial success.


How did you approach budgeting when you were a new grad? Do you have any advice on how to manage money right out of college? What’s one fun category you like to include in your budget?

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Erin M. is a personal finance freelance writer passionate about helping others take control over their financial situation. She shares her thoughts on money on her blog Journey to Saving.


  • These are great tips. After graduating, I found budgeting to be more difficult because for once I was no longer a poor college student. I was finally able to afford more but still wanted to keep myself in check. These are great areas to look at because they cover some of the most basic areas that most people will have expenses in.

    • Erin says:

      Lifestyle inflation is definitely really easy to succumb to after college, provided you can get a good paying job. It pays to have financial goals set up, too!

  • I think a lot of budgeting in the beginning is trial and error. These categories are a great place to start, and then you can adjust accordingly based on your own needs / wants / lifestyle.

  • I see a lot of people get trapped into the “I need to make rent” and then forget about everything else budget early on – they don’t realize that planning for everything will make every singular thing easier.

    • Erin says:

      Very true. Rent is a big deal, but far from the only one. You never want to get in over your head with rent and then not be able to afford to eat! They’re all pieces to the puzzle.

  • I feel new grads should take things slow, and not rush into big purchases. Like a new car, just because they have a new job. Keeping things frugal in the beginning will go a long way to set someone up to retire sooner. The end goal is to have freedom so think in that aspect if your young.

    • Erin says:

      Agreed. Unless you’ve been saving and managing your money really well, buying a new car or a house so soon after graduating is just going to be financially overwhelming. It’s better to ease into things. Plus, your values are probably going to change! I know mine have. It would be a waste to spend so much only to regret it down the road.

  • This is great advice! Budgeting has really changed my life and the way I view the world and my future.

    I think that it’s something that people should be doing while they’re in college. This can help them avoid falling into student loan debt or adopting lifestyles that are incompatible with their financial situations.

    • Erin says:

      Thanks, Monica! In a perfect world, I’d say budgeting is important as soon as you start earning money or have any expenses to take care of. I didn’t, only because my situation was fairly simple in college, but I still made sure to save. I really wish more financial literacy was taught in high school or college, though.

  • Great post, Erin. When I was a new college grad I really didn’t budget, and honestly can’t say I budget at this time, either. I think tracking your spending is an important first step for grads. If you know what you are spending it’s much easier to make adjustments.

    • Erin M says:

      I definitely agree with that, and I’ve done the same. I had a spreadsheet set up to track spending, but I didn’t budget in the traditional sense. Just depends on how well you manage your money and what works for you!

  • These are all great tips! When I graduated, I bought lots of clothes and shoes, even if I really don’t need it. Budgeting for me is really hard to do, but now I tried my very best to keep my spending low.

    • Erin M says:

      That’s definitely another easy trap to fall into as you enter the workforce. I had to get dress clothes, but tried to do it as cheaply as possible.

  • Good tips! I should’ve set up a budget when I was a new grad. If I had, I wouldn’t be in debt like I am today. Sigh!

    • Erin M says:

      It’s tough because when you graduate, you have high hopes for the future and your earning ability. Unfortunately, reality doesn’t always cooperate!

  • Hannah says:

    Great tips! It’s so important to set those savings goals right away. Whether you want a car, a vacation, a wedding, or just larger investment accounts, getting into the savings mindset is well worth it.

    • Erin M says:

      Yes, it’s all about the mindset! That’s the hardest part. I grew up with my parents being in debt, and I could have easily fell into the mindset of “charge and pay later.” Thankfully I didn’t – it can be hard to get out of.

  • Number nine is great, having savings as part of a monthly budget is important. When I first started out I did the “save whatever’s left” thing. Some months I saved a bit, other months I saved nothing. Later on I started to budget for a certain $ savings each month. That made it much easier to save regularly (although sometimes I did have to dig into savings in a pinch)

    • Erin M says:

      Glad to hear it worked for you, Thomas! I try to save as much as possible so I’ve never tried it, but I’ve seen others struggle with saving when everything else is up in the air. Budgeting and getting organized helps.

  • Entertainment is the last thing I spend on after saving some and paying my bills. I think this kind of expenses is the one I can really sacrifice such as gym membership. There are lots of videos online on exercises that use body weight and no equipment.

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