How to Budget Your Finances

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Imagine if you will, being able to get everything you need paid off by the end of the month and still having extra money to play and/or save with. This, my friends, can be accomplished with a monthly spending plan. It’s not that hard to make either.

For starters, make a chart.

When I budget my finances I always start by making a chart and gathering up all my bank statements and bills.

I usually make my charts on Microsoft Excel (to me, that’s the simplest way to do it).

If you don’t have this program, no worries, just grab a pencil and a piece of paper and draw a chart out accordingly.

Here’s how you make the chart:

  • First off, you need to know how much money you’re bringing in each week and every month.
  • Then you need to check all of your bank statements for the averages of what you mainly spend your money on.
  • Note how much your car usually takes in gas each week/month.
  1. Your first column should read “Weekly Income.” Even though it’s the same each week, write it down for each seperate one going downwards.
  2. After you’ve writen each weeks income all the way down, directly below the last week put in “Monthly income,” except this time fill the income part in with the actual amount.
  3. Your second column should read “Rent/Mortgage.”
  4. Your 3rd should be “Utilities.” Figure out the average as they do tend to fluctuate.
  5. Your 4th should be for any other bills you normally have. For instance, car insurance or paying off a loan or some debt. If there are a lot of extra bills, just add them all together and make a note under the chart what all is included. (Make sure you’re just writing in the monthly amounts right now, we’ll get to the weekly in a minute.
  6. Your 5th should be “Food.” How much do you normally spend on groceries?
  7. Your 6th should be “Gas.” Average amount please. (Make sure you getting the correct amonts or pretty close to it, if you don’t the budget may not work properly).
  8. The rest of the columns should be according to your particular lifestyle. If you have kids, what about “Childcare” or “Clothes.” If you enjoy going out to see movies or you rent movies a lot “Entertainment.” Make sure you are getting every thing.

Your last two column should read “Incidentals,” and then “Savings.” Once you’ve filled everything out up to this point, add each monthly cost together and subtract the total from your monthly income, decide how you want to split the money up between incidentals and savings. If you don’t know what incidentals means, think of family emergancies or any emergancies at all. For example, your car breaks down tomorrow, what are you going to do?

  • Now we are going to fill in the weekly sections. All you have to do is divide each columns monthly avg. by 4 and you get the amounts for each week. This will show you money that you need to put to the side, and money that you have to spend.
  • IF you don’t like the savings outcome, figure out what you can cut back on. Keep working on it untill you are pleased with the results.

If you follow these simple steps, then you will have a good budget that is practical and works for your particular lifestyle.

Thanks for reading.

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