The goal of budgeting is to have your income exceed your expenses. Spending less than you make ensures you have money on hand for emergency situations. Another reason to spend less than you make is so you can save money for the future. Saving allows you to eventually get the things you want (a swanky new car, a comfortable retirement, etc.) while staying within your budget and avoiding debt in the present.
One recommended method for saving is: “Pay yourself first.” Make saving part of your budget and make it one of your fixed expenses. Set a percentage or dollar amount that you want to set aside each month and move it into a savings account as soon as you get paid, rather than waiting until the end of the month to set aside whatever money is left over. Some employers and banks offer services that move this money around for you as soon as you receive your paycheck; take advantage of those programs. If you don’t have a bank account yet, get one. The University of Wisconsin Credit Union (UWCU) has a location in the lower level of the University Center, and they have services specifically designed for students.
Whatever Happened to Thrift? by