I've graduated from graduate school and am working and living on my own with no debt (other than student loans).

I'm wondering how to go about setting up a good budget? How do you determine the maximum amount you should pay for items that you can control (such as a car note, rent, etc.)?

I want to work out a budget that allows me to live comofotably and save, but don't know where to start?

I'd start with figuring out the rent, perhaps by finding places you like in a location you like and seeing what they cost. Moving is a PITA so IMHO having somewhere to live that you are comfortable with is a big priority. Once you have that number estimated you can go down the list in some sort of priority you set yourself. Is a nice car important? Perhaps figure that cost out next.
Or you could figure out your savings goals first if that's your first priority.

I guess that's the place to start, grabbing a sheet of paper, listing all your proposed expenses, and prioritizing them. That way the things that are most important to you get priority treatment in your budget.

Pre-tax have your company take out $$$ for retirement, even if you start out small, just start you wont miss it!!!

Then I would say your take home paycheck is truly what dictates your budget & what you can spend/save. Some things you will have to make goals, others require your immediate attention.

How I started after college, took my NET pay and deducted housing, utilities, trans to work [metro/gas], car payment [if u own], food, school loans [if u have] first [ie, necessities].

Afterwards, I began to deduct lux items with the remaining balance...yours maybe different, but mine were spa, eating out, clothing/shopping, cable/internet, salon visits, pocket cash [ie, wants].

List them out [here if you want feedback], tweek as needed, once I got a good $$$ flow going I began to save for long term goals, home ownership, Emerg Fund, added add'l % to retirement.

Its a marathon NOT a race.

Thanks! I'll probably come up with a budget and report back in a few weeks. I'm getting a salary increase in a few weeks, so I'll have to see what my take home is and go from there! I guess I'm off to a good start, even though my salary is going up, my rent will be going down!

I've already started contributing to my 401K and plan to contribute up to my employer match when I sign my employment paperwork in a few weeks. I should do it from the start so that I don't miss it! Thanks for the advice and please keep it coming!

instead of waiting until you get your raise, live on what you make now, and pocket the raise into a fund for emergencies

That is the plan except for two small things:

1.) My student loans will be in repayment
2.) I will have a car note. So that's what I'm trying to figure out, just HOW much car note I should be the MAX that I take on!

Yeah I agree with Jen

Your budget will change 100s of times, start it from now when you live on less, then add'l monies can be considered a bonus and put away for small emergency fund. Open up a money market & place it there.

Here's a table with 3 different percentage guidelines to sort of help get you started. (e.g. no more than x% on housing, save 10% of everything you earn, etc). You can google "personal budget percentages" to see what folks are doing/recommending. Be prepared to see a lot of Ramsey type stuff, but on budgeting, I give him props, mostly.

Category Dave Ramsey Typical Credit Counseling Advice CCCS

Charitable Giving 10-15% 4%

Housing 25-35% 24% 20-30%

Utilities 5-10% incl. in Housing 4-7%

Food 5-15% 14% 15-20%

Transportation 10-15% 17% 6-20%

Medical 5-10% 6% 2-8%

Clothing 2-7% 6% 2-4%

Invest/Savings 5-10% 13% 5-10%

Debt Payments 5-10% 13% 15-20%

Misc. 5-10% 5% 5-10%
(Personal,Recreation,Life Ins.)

ETA - tried to "pretty" up the data (It didn't work).

IMO, start off with a reliable used car, such as a accord or camry that you can get for $15k or less, keeping your payments under $300.

having a car payment sucks, and you don't want to be upside in a car and hating your choice. you can always upgrade later when you have a firm grip on your finances.

that's my opinion.

Thanks for all of the advice. I'm also working a part time job, so my goal is to save that entire check and really to never see it. I need to open another savings account that I don't have easy access to and have my direct deposit transferred to that!

My goal is to have my car payment be less than 300.00 a month. I wouldn't want to pay more than that at all!

I also know that I need to eat in more!

Also, this is SOOO HARD! I admit, I'm part of the "me" generation. And the generation of "I went to school for x amount of years and I deserve this." But I'm going to resist the temptation of getting a car with a 500.00 car note just because I can, or doing a whole bunch of excessive shopping! I've read too much on this board to do anything else!

Some good suggestions posted here so far.

I'm a fan of Elizabeth Warren's personal finance book All Your Worth. In that book, Warren lays out what I think is a pretty good goal for managing expenses:

50% of income to needs -- defined as basic living expenses, such as housing, transportation, insurance, basic food stuffs, utilities and legally/contractually required payments such as student loans/child support/car loan payments.

30% to wants -- anything you want to spend money on that's not included in the other 2 main categories.

20% to savings -- for emergencies, retirement, planned expenses. This would also include payments on unsecured debts.

I think it's a good formula for keeping your finances in balance (and a goal that can be worked toward if you're not there), and recommend reading the book for a more detailed explanation. It's probably available at your local library.

So if your car loan keeps you within the 50% for needs, it can be managed and is probably OK.

Is that 50% of your gross or your net?

IIRC, I believe it was the net pay. Haven't read the book for a few months.

Thanks!

Always use NET figures, dont calculate $$$ not in your hand for your budget.

My suggestion for the MM account is ING or the like, good way to stash $$$ & not see it as temptation. Its not easy getting started, BUT once you do it actually becomes an addiction & fun as you make goals & surpass them! I speak from experience!!!!

WOW! I see that you are saving WONDERFULLY! I usually use my net for everything because I *know* that gross means nothing, I was JUUUST making sure! Boy is it a big difference between gross and what actually hits your account!

After I get settled into the new job and see where my money is actually going, I'm going to open another account to stash money..I already have a little saved up!

never heard that. I like it!

Yeah, I first heard of the book here (someone else posted about it). I think it's a much better book for the average person than most of what's out there.

I'm not at the 50/30/20 ratios myself yet, but definitely working towards it.

I know I won't be able to be at the 50/30/20 ratios right away. Especially not until I consolidate my student loans, but it's a good goal that I'm going to work towards!

Nothing else to add, just couldnt agree more.