How to Create a Personal Budget

Budgeting is a must for us all. Learn how to create your own personal budget. You'll find ways to better save and spend your money!

Instructions

Difficulty: Moderate

Things You’ll Need:

• Calculator
• Paper
• Pencil/eraser
• personal bank statements
• Receipts

1. Make a list of all your monthly expenditures:
   rent
   utilities
   phone
   cell phone
   internet
   groceries
   gas/transportation
   eating out
   personal items (shampoo, razors, toilet paper)
   entertainment (dates, movies)
   clothing
2. Divide this list between fixed items (like rent) and variable (eating out).
3. Total the cost of the fixed items.
4. For the variable items, look at bank statements and receipts to make an educated guess as to how much you spend on these things. (It may befit you to consciously save all your receipts for one month prior to creating your personal budget.)
5. Total the cost of the variable items.
6. If you're looking for ways to save money, you might try to cut out all the "extras" for a week. Things like bottled water, gum, mints, lattes and sodas really add up! Then find ways to cut out or cut back on those extras. Use a refillable bottle for water you purify at home. Buy gum in bulk. Don't buy sodas on-the-go; buy a case at the store and stick a few in your car.
7. At the beginning of each month, prepare a list of your predicted expenditures--both fixed and variable. Try to stick to that predicted list. If you're trying to save money (and who doesn't need some extra cash), consider using cash only and saving all of your receipts. Some people find it helpful to put cash in designated envelopes for each expenditure (groceries, transportation, eating out, etc.)