Money - Debt - Credit - Winning
Our journey and tips to get spending under control, create a plan to eliminate debt, resolve any current personal financial crisis, and sharing ideas for how to build a secure financial future
This is for those that are new to the necessity of a budget or are have tried and are needing a refresher.
Creating and tracking a monthly personal or household budget, in its simplest terms, is far better than not having one.
The first step in the process:
- Make a list of all of your monthly expenses and total them up
- Calculate what your total monthly income is
- Compare your total income to your total expenses
This will let you understand what you can afford to spend on any miscellaneous items in a given month. It will also let you determine if you have money left over for savings or making extra payments to anything (such as a loan or credit card).
This can easily be done with paper and pen. You might also rather utilize a spreadsheet which can make this easier to do each month. A spreadsheet will do all of the basic math for you and allow you get your expense categories set up to use over and over.
When you use a spreadsheet for your basic monthly budget practices you can use the same template to update each month. See below for a download file of a basic budget template that was provided by Microsoft. If you don't have access to Microsoft Office on your computer, the spreadsheet can also be utilized in Google's free Sheets app online.
Knowing if your income is more or less than you are spending will help you make adjustments where needed. Spending more money each month than you have in income is not a pleasant experience. Something is going to have to go unpaid. With your simple personal budget you can begin to make sure the necessities are paid first and feel better about knowing how much extra money you have in any given month.
Budgeting takes practice. Once you make your budget part of your monthly routine you will want to keep track of your actual spending so that you can track the budgeted amount to the actual amount spent each month. This will tell you how well you are doing with staying within your budget.
Once you feel comfortable with the process of basic budgeting you may like to consider some of the online tools available. The advantage to utilizing a budget system online is that many of them will connect to your bank account so that your transaction history is automatically loaded for you. This lets you go through each item and categorize it into the appropriate budget category. Then you are able to see a up to date total for what you have spent for the month in any budget category.
If you are just getting started with budgeting, or are re-starting, don't over complicate it. You will find the most success with your personal budget by making it a simple process that you actually keep up with each month. Staying on top of how much income you have vs how much you spend each month is your top priority.
The picture below is a screenshot of the monthly budget calculator spreadsheet. You can download the file with the link right below the picture.
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