College can be trial by fire — a test of how to cope with pressure, freedom, distractions, and a flood of credit card offers. It's easy to get into a cycle of overspending and unnecessary debt as a student. But there's salvation in the form of a humble money management tool — a budget.
The goal of a budget is to spend less than you earn and to save for big ticket items like travel or a new DVD player, and emergencies like losing your job or having an unexpected expense.

Creating a budget starts with monitoring and documenting your spending. Devise a worksheet and follow the steps below:

• Track your spending - Keep a spending diary for a month or two to see how much money you spend on a daily and monthly basis. To determine your cash flow, you should track your spending for several weeks. Record every dime you spend and how you spend it, whether by cash, check, debit card, ATM card, or credit card. Keep receipts and slips. Gather your records. Organize the cash receipts as well as your credit card monthly statements and your checkbook register.
  
  
• Itemize your income and expenses - Using your cash flow worksheet, prepare an accurate account of where you're spending your money. List your monthly income and include salaries from jobs, Federal Work-Study, allowance, and any other income.
  
  
• List and total your monthly expenses - Based on your spending diary, list expenses in the following categories:
  - Housing - your rent
  - Utilities - phone, cable TV, laundry, Internet access
  - Food - groceries, dinners out, snacks
  - Auto - monthly car loan payments, maintenance, parking, gas, etc.
  - Insurance - premiums for health, disability, dental, auto, and apartment. (If you pay quarterly premiums, divide each by three to get a monthly figure.)
  - Education - your tuition, books, supplies, and student loans payments (if any)
  - Entertainment - movies, parties, nightclubs, travel costs
  - Clothing - include dry cleaning and repairs
  - Personal care - toiletries, haircuts, gym membership
  - Health - out-of-pocket expenses (not covered by insurance) for office visits, treatment, prescriptions
  - Credit card debt - if you carry a balance on your credit card, list the amount you pay off each month
  - Miscellaneous - gifts, unanticipated small expenses
  
  
• Total and compare the income and expenses columns to create your budget - Do you have money left over? If so, you're in good shape and you're spending less than you're earning. Why not budget the extra money to pay your credit card or other debts? If you still have money left over, consider boosting your savings. If your expenses exceed your income, start tweaking the "variable" budget expenses — those expenses that aren't fixed every month. If you can't find ways to cut back, then take a good look at what you currently call "necessities." They may be luxuries in disguise.
  

A good rule of thumb is to have three to six months worth of living expenses in emergency savings. Once you've figured out your monthly budget and seen that you stick with it, try to save three to six times that much in a savings account or investment you can easily access. It's okay if it takes a while, as long as you're putting something aside each month.

Automatic transfers from your checking account to your savings account make reaching your savings goal easier