How to Make a Personal Monthly Budget

Budget properly to avoid breaking the bank.

Saving money -- or even paying your bills on time -- is largely a matter of keeping track of your money and how you spend it. If you feel like you're stretched too thin from month to month or you're simply curious as to where all of your hard-earned cash is going, you should make a personal budget. This helps you see not only where your money is going, but where you can cut back to make room for other things, like paying off loans or saving up for emergencies.

Things You'll Need

• Journal
• Pen or pencil
• Pay stubs
• Past bills
• Grocery store receipts

Instructions

1. Determine how much money you make per month. If you are on a fixed salary or reliably work the same amount of hours from week to week, look at your most recent pay stubs to see how much you are earning.

2. Write down a list of fixed expenses along with due dates. These are expenses that you absolutely must pay every month and do not change, or change very little -- expenses like rent/mortgage, car payments, phone bills and gym memberships. Total these expenses and subtract this total from your income.

3. Write down a list of all your bills that vary. For your heating bill, for example, average the past three months to determine a ballpark figure. Again, total these expenses and subtract this figure from your income.

4. Look at the amount left over -- this is how much you have to spend after bills. Bear in mind that this includes necessary but discretionary spending -- your groceries, for example. Save all of your grocery store receipts for a month and add them up at the end to determine how much you spend -- if necessary, go through each receipt and mark things that you can go without, like soda, ice cream or donuts.

5. Monitor your spending. Keep track of every purchase every day in a journal -- mark each purchase down as either necessary or unnecessary. At the end of the month, go through your journal and add up how much you spent on unnecessary expenses -- you may be shocked at how much you spend on coffee, cigarettes or trips to the vending machine.

References

• Perkstreet Financial: How to Build a Monthly Budget the Old-Fashioned Way
• The Nest: How to Make a Monthly Budget Worksheet
• For Dummies: How to Create a Monthly Budget

Resources

• U.S. Department of Education: Budget Calculator