How to Budget Your Income

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Budget Your Income

Budgeting your income will help you stay on track and plan for both saving and spending. By using a budget to plan expenses, you will feel empowered by spending only part of what you have and saving the rest for future use.

Things You'll Need

  • Paper and pencil
  • Calculator
  • Pay stub or receipt
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Instructions

    • 1

      Determine your monthly take home pay. If you're paid more than once a month, add up your paychecks to figure out the total.

    • 2

      Subtract all of your expenses from a previous month from your total monthy income. Refer to bills paid, receipts accumulated, and cash withdrawn from your bank accounts to determine your expenses.

    • 3

      Use the figure to determine where you stand financially. A positive number means you have a surplus, or money left over each month. A negative number means you have a shortage, or that you are spending more than you are bringing in.

    • 4

      Write down categories for your spending. These might include, but are not limited to, automobile expenses, home expenses, food, clothing, medical and entertainment.

    • 5

      Determine areas in which you could cut back spending. Create a new, reasonable spending amount for each category. Even if you find you do not have a financial shortage, you still may be able to increase your savings.

    • 6

      Use your new budget plan as a guide for future spending.

Tips & Warnings

  • Only spend when you need something. Unnecessary spending leads to larger bills and less savings.

  • Every time you find yourself paying for something or making a puchase, assess how it could be reduced or eliminated.

  • Set a savings goal each month for motivation.

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Comments

View all 8 Comments
  • justo Mar 18, 2009
    great article. just in time with the economic crisis. 5*
  • Linda McCloud Oct 10, 2008
    Today, more than ever, we need to be budgeting. Thanks for the tips.
  • Fire Dancer Oct 08, 2008
    Budgeting is key. Thanks.
  • Melanierose Oct 07, 2008
    Lovely budgeting tips, thank you for sharing.
  • Shirley Philbrick Oct 06, 2008
    I've done #3 a long time and taught it to my daughter.... you've got some great pointers, especially for young money managers !!!

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