How to Set a Monthly Budget
Setting a monthly budget can be vital to controlling finances in tight economic times. A budget can help you manage monthly bills, create savings, reduce spending, and set financial goals.
- Difficulty:
- Moderately Easy
Instructions
Things You'll Need
- Computer
- Spreadsheet Software
- Budget Records
- Calculator
- printer
- paper
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1
First work together to set a goal of what's most important financially and prioritize either in percentages of 100 or by number order to help begin to set your monthly budget.
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2
Then write down all forms of monthly income including salary, bonuses, commissions, or income from family business or investments for your budget.
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3
Then make a list of all your expenses including monthly, quarterly, and annual expenses and break them down into set monthly totals for your budget.
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4
Now begin setting financial short and long term goals to work towards using your monthly budget. Financial goals include paying off credit cards, long term savings, liquidity, and short term money for holidays, vacations, etc.
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5
Now organize all expenses into categories distinguishing regular bills, credit cards, family expenses, personal allowances, savings, and liquidity.
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6
Start with monthly income totals at the top and then list your budget expense categories by priority including first spending mechanisms like credit cards, loans, etc. high on the list.
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7
List your remaining monthly expenses by budget priority starting with obligations, then family necessities, personal and family allowances, pocket money, emergency fund, etc.
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8
To balance your budget subtract your expenses including savings from your monthly income making sure to set a liquid cash fund for unexpected emergencies or a cushion for making budget adjustments.
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1
Tips & Warnings
set your budget totals rounded higher for obligations and necessities to allow for over spending cushions in other categories.
record your budget the best way for you to use it at first whether using a computer spreadsheet or just a poster, chalk board, or paper.
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