Lizette Ohlund

By Lizette Ohlund of The Pathfinder

October 1, 2025

Congratulations! You're in college now. You may or may not be living at home with your parents anymore. You might be responsible for buying your own groceries. You might even have rent that you need to pay. All these adulting things can be challenging to manage on top of everything else you have in your life. 

Budgeting is a concept that many adults use in their every day lives. Your parents probably budget to some degree. If you don’t budget and don’t need to budget then you are part of a very small portion and probably should budget anyway. Budgeting allows you to not only know how much money you have but also what your money is doing or where it’s going. It also serves as a way to prepare yourself for any bad or unexpected things that may happen.  

The budget we will explore is called the 50-30-20 rule. The 50-30-20 rule takes your gross earnings, the money you make after taxes have been taken out (the money that shows up in your account), and divides it into three categories. Needs, wants, and savings.  

An example of needs would be groceries, tuition, rent, gas, or any payments you have like insurance or a phone bill. These are all things that you simply cannot not pay. They are the non-negotiables.  

Wants are different. These are things that you want but don’t have to have in order to survive. They can include money for new clothes, subscriptions (such as Spotify, Netflix, and Amazon),experiences and more. Finally, savings might seem obvious, but it's more specific than simply saving money. Savings could include money put aside for a big trip for spring break or a special gift for someone in your life. While having a savings account that you can add money to is an excellent idea and one that everyone should have when they have a limited income, things tend to get cut for more short-term thinking. 

Now that we've defined what needs, wants, and savings are, we have to look at how much money you make per paycheck. For the sake of simplicity, we are going to use a fictional student who attends LC named Bob. Bob is a sophomore in college and is living in an apartment with a friend. Bob works at the grocery store on the weekends and a few days during the week. Bob makes $10/hour at his job and works about 25 hours a week. Let's help Bob make a monthly budget using the 50-30-20 rule. 

Income: $15/hour 25 hours/week 4 weeks/month 

Income = $1,500/month 

Expenses (NEEDS) 50% of income: Expenses (WANTS) 30% of income: 

Rent: $500 Netflix: $14 

Gas: $100 Spotify: $6 

Insurance for car: $20 Eating out: $100 

Food (grocery shopping): $100 Experiences: $200 

Phone bill: $30 Have fun money: $100 

Wifi: $10  

Total Needs: $760 Total Wants: $420 

Bob’s total monthly expenses (needs + wants) are $1,180, which is about 80% of his income. Bob is saving to take his girlfriend to a concert in a few months. He is also saving to get his brother a new computer for his birthday. Bob has decided to put aside the remaining money from his paychecks to get him closer to those savings goals.  

This is just one example of how budgeting can be done. Not everyone will be like Bob, where you know all their expenses or their income in advance. If you can answer some of the questions about where your money is going and what it’s doing, you’ll be better off.