There are two basic components to any money management system: the plan and the execution. The plan (aka your budget) tells your money where it should go. You successfully execute your plan through automated systems, self-control, and tracking where your money actually goes.

The Plan: Your Budget

Budgets are an incredibly flexible tactic for reaching your financial goals and fulfilling your values. Any type of plan that directs your money is a budget; it isn’t necessarily restrictive or limiting. While there are many different ways to budget, every budget will have some similarities.

Further Reading: How to Create Your First Budget as a Grad Student (a Grad Student Finances Guide); Six Different Ways to Budget Your Money

An effective graduate student budget should include:

• A target amount of money to live within, i.e., income after taxes are withheld or self-withheld
• One or more financial goals, e.g., saving or debt repayment
• A plan for handling large, irregular expenses

There is plenty of variation within that basic structure for different types of budgets. You can be as general or as detailed as you like in delineating your income to your regular fixed and variable expenses.

Resource: Grad Sense Budget Calculator

The Execution: Tracking, Etc.

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The single most effective action you can take to change your spending is to track it. Even without budgeting, tracking your spending will cause behavior change for the better. Tracking is a major accountability tool.

You can accomplish tracking your spending manually or in an automated manner. In the manual method, you literally note every transaction you make into some kind of ledger – paper, spreadsheet, or app. This method takes time, commitment, and memory, but it forces you into a high level of intimacy with your spending, which is ultimately better for changing it. In the automated method, you use the electronic spending record for your debit and credit cards do the tracking for you. Most typically, you connect each of your banking and credit accounts with tracking software; the software then downloads and categorizes all of your transactions. This method is easier to maintain, but you still have to check up on the data periodically.

The best way to accomplish your financial goals such as saving is through automation. Once your goals are automated, you no longer have to use your memory or willpower to accomplish them. Even better, your automated transfers should pay yourself first.

Of course, at the end of the day it is down to you to stick to your budget. Tracking tools and automation can help, but you have to be committed to living within your means and reaching your financial goals.

Tools

There are many pieces of software and apps available to help you with tracking and budgeting. You should invest some time into finding one that fits your style and personality well before committing to one, because the switching costs can be high. Your bank might provide an app or program for free, but if you would like to budget and track across accounts an independent program is preferable.

A few examples of leading budgeting and/or tracking software are:

Mint: Hook up all your banking, credit, investment, and debt accounts for an instantaneous net worth calculation. Create a monthly template budget and track your spending against it. Keep track of your bills. Set savings and track savings goals. Analyze your past spending. Free.

You Need a Budget: Hook up all your banking and credit accounts. Follow four rules: 1) Assign every dollar a job. 2) Save in advance for irregular expenses. 3) Update your budget as needed. 4) Live on last month’s income. Free for students.

Mvelopes: Hook up all your banking and credit accounts. Digitally implement the envelope budgeting method (allocate money each month to category-specific envelopes and then spend from them). Especially helpful for handling irregular expenses. Free and premium versions.

Every Dollar: Dave Ramsey’s budgeting software that follows his budgeting principle of giving every dollar a job. Manual tracking for the free version. Free and premium versions.