Things You'll Need:
- Pen, paper, and calculator,
- MS Excel, or
- Mint.com
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Step 1
List all sources of income you receive on a monthly basis. Write down all expenses such as food, utilities, mortgage/rent, child care, insurance, and transportation. Use your most recent bank statements, bills, and receipts as a guide. Budget 5% of your take home pay for unexpected purchases that pop up during the month. Subtract all expenses from your income. The difference is your monthly cash inflow/(outflow).
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Step 2
Whether your monthly cash flow is positive or negative, identify areas to increase income and reduce or eliminate expenses. If you receive a large tax refund at the end of the year, estimate your tax liability for this year and collaborate with your company's payroll department to increase your withholding allowances so that you get more money back during the year. Cancel any subscriptions or services you're not using such as credit monitoring and gym memberships. Line by line, ruthlessly trim each expense.
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Step 3
Measure your progress. Keep track of your expenses by recording everything you purchase using basic pen and paper, MS Excel, or Mint.com. Try your best to stick to the budget you've outlined. Immediately take corrective action if you see you're beginning to go over budget in a certain category.
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Step 4
Don't beat yourself up. You'll almost certainly fail to adhere to your first budget. It takes practice. The more you track your expenses, the better you'll get at budgeting. Keep trying. You'll get it.
Comments
newstime1999 said
on 8/27/2009 Great suggestions. Keeping your receipts and looking over what you spent helps.
LilacGirl said
on 8/11/2009 Good article, with great tips and suggestions for a budget.
MyJB said
on 6/7/2009 Nice tips on budgeting. Thanks for sharing.
omghow said
on 6/6/2009 We all need to have room for improvement on this subject. Thanks
goodguy2000 said
on 6/4/2009 Nice article, recommended*