Monthly Budget Help
Keeping a monthly budget isn't a task only for corporations and small businesses. Individuals need to handle routine living expenses and debts. It is advisable to put together and implement a practical budget that you can use throughout the year. To do this, you first need to understand some basics about budgeting and the resources that are available to you.
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Parts of the Monthly Budget
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To calculate a budget, factor both income and expenditures. Income includes funds like paychecks or pension benefits. Don't count items like tax refunds in income, as these aren't guaranteed. You should divide your expenditures into two categories. The first is non-variable expenditures, which are expenses that you know with certainty you'll have and which are roughly the same amount per month, such as your rent or mortgage. The second category is variable expenditures, such as entertainment. These are not required expenses and may be adjusted as needed.
Tracking Expenses
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A challenge with your monthly budget may be that you plan well but end up spending more than you earn, as explained on the Living on a Dime website. Your budget may be unrealistic. The key to solving this problem is to track everything you spend. Write your expenditures down in a memo book as you go, or monitor your checking balance by going to your bank website and reviewing your transaction history. Without this snapshot of what you are spending per month, you won't be able to tell if your budget accurately reflects what is happening financially.
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Savings
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Good monthly budgets do not leave you out in the cold should the unexpected bill arise. Plan for items that may not be on your regular budget list, according to the Ohio.com website. Review and total all of the bills that were unexpected over the last twelve months. This will give you an estimate of the annual extra savings that you will need to account for in your current budget. Treat the amount like all of the other bills that must be paid, but place the money in your savings account.
Worksheets and Spreadsheets
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Monthly budget problems sometimes arise because people may not realize all of the expenses and income they have. They also may not understand how their cash flow works. Address this by creating budget worksheets or spreadsheets, as recommended by the WiseBread website. These show you every bill and income source you have along with the total. Check them off as you pay them every month. This will help you avoid late fees, particularly if you include the date by which each bill needs to be paid and link it to a mobile device or software/email payment reminder. Some basic worksheets are available on the Christian PF website (see the Resources section).
Common Missed Items
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If you come up short in your budget, it may be because you have not accounted for uncommon expenses. For example, you may have taken care of your rent for the month, but you may not have considered the cost of going out of state on your vacation to visit family or gifts for birthdays. Even though these events may happen only once a year, if the expense is large, you'll need to set money aside for them each month.
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