How to Make a Monthly Budget and Save Money
When you find yourself wondering where all your money went before you had a chance to put any into savings, it is time to put together a monthly budget for your household. This tool allows you to plan how you will spend and save your money. It will also give you concrete numbers that you can track each month to stick to your goals. Making a budget helps you find areas where you are spending more than you would like so you can cut down on those expenditures.
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Instructions
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Calculate your monthly take-home pay from your recent pay stubs. If you get paid twice per month, multiply the paycheck amount by 2 to calculate monthly pay. Multiply by 2.17 if you get paid every other week or 4.33 if you get paid weekly.
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2
Write down your monthly income at the top of a piece of paper. If you or others in your household have multiple jobs, write down the monthly income from each job and total them to find your total-monthly household income.
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3
Write down the amount and purpose of each of your fixed monthly expenditures below your income. These include housing, utilities, insurance, debt payments, transportation and child care. If you do not know the amount, look it up on your most recent bill. If it varies slightly from month to month, like with utility bills, average the last few months and record that amount on your budget.
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4
Subtract the fixed expenses from your monthly income to find out how much money you can spend on other things. You can call this your expendable income.
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Decide how much money you want to save. You could start with just $50 or $100 per month, or if you have a more ambitious goal, use that. Subtract the amount you want to save from your expendable income. Set up a monthly transfer to move that amount of money from your checking account to your savings account automatically.
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Divide the remaining expendable income between other things you would like to spend your money on each month. These include groceries, eating out, entertainment, gifts, clothing, dry cleaning, personal hygiene, pet care, subscriptions, electronics, household goods and anything else you buy regularly. You should also have some money budgeted each month for miscellaneous purchases that don't fit into any category.
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Track your spending next month. Write down how much you spend in each category listed on your budget and compare it to the amount you allocated for that category. If you are spending more than you allocated, you either need to change your purchasing habits or reallocate funds by moving them between categories.
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Tips & Warnings
Budgeting worksheets, websites and software can help you keep better track of where your money is going. If you have a lot of debt, you could include a category for "extra debt payments" in the expendable income portion of your budget. Making extra payments reduces the amount of time it takes to pay off your debt.
