Oftentimes, it can be difficult to start and stick with a budget, which is usually why students end up falling of the wagon. First-time students are highly susceptible to overspending. We are suddenly given free reign to manage time and finances as we see fit, likely for the first time without any form of supervision. If a student hasn’t been educated on budgeting before, whether from their parents or in high school, then making the transition to financial independence can be difficult. Budgeting is a challenge for even the most seasoned adults, but it may not even be on a student’s radar.

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Budgeting is also important because college years can be some of the most expensive times of a young adult’s life, with an education bearing the heftiest price tag it has ever had. College graduates in the U.S.  left school owing an average of $35,000 in combined student loans and credit card debt. 39% of these graduates admit that given another chance, they would’ve done things differently: saved more, borrowed less, or attended a more affordable school. If you’re new to budgeting, then you’re not alone. According to a poll conducted by Gallup, only one in three Americans prepares a detailed budget of their finances. If you choose to go against the trend and embrace financial literacy in college — your wallet will thank you in the long run.

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This guide will help you understand the value of a budget and walk you through the process of tracking your income and expenses. We will also show you how to create a successful budget with tools and tips that help you identify the areas where you can most effectively save money.

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The first step in creating a budget is to asses your current financial situation. You should log on to your bank or credit union’s website and review your financial situation over the past month. You’ll want to make a list of all of the things you spend your money on in the typical month, as well as an average cost of each item. Examples of these include average costs for a month’s groceries, housing costs, car payments and any miscellaneous spending. The next step would be to categorize your spending into “needs” and “wants” and sort all your spending accordingly.

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Now that you have organized your expenses, it is time to crunch the numbers! Start by adding all of your necessities together and then subtracting that number from your monthly income. This number is your discretionary income. After organizing everything,  see what items you can adjust or cut from your list to get your budget to where you’d like it. For example, if you find that you are spending more money than you earn and are also spending $50/month on movie tickets, then you should consider cutting back on this “want” to balance your budget. This step takes the longest, but getting your finances under control is definitely worth the effort. Now all of this is easier said than done, and more often than not, the difficulties are faced when putting your budget into action.

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Tracking and managing your expenses through an app, computer program, or bank service can simplify the process and reduce the likelihood of human error. An excellent app is Mint, which is designed to securely connect with your bank account and automatically organize and categorize your spending habits. It offers suggestions for ways to cut back on the areas where your spending is the highest.

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Regardless of your preference on budgeting, the important thing is to just make sure you do it. Staying organized is the key to maintaining a balanced budget, and can prepare you for a healthy financial future.