How to Write Up a Monthly Budget
Money is something that everyone has to manage, whether for yourself, your family or your business. Creating a budget helps you keep track of monthly expenses and enables you to organize payments. This may be especially helpful if you struggle with your bills and have trouble making your payments. By sticking to a budget, you may be able to make some cutbacks and save some money.
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Instructions
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Gather together all the documentation relating to income and expenses, such as bank statements, credit card statements, utility bills and phone contracts.
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Draw a table detailing the projected income and expenses for the coming months. You can plan a few months at a time or create a budget covering the whole year, but remember that creating a long-term budget may be more difficult due to unforeseen circumstances and unexpected expenses.
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Determine your net income for each month. This could be a set figure, paid from your employers by check or directly into your bank account on a specific date each month. If your income varies depending on hours worked or commission, project an average figure based on the previous six month's income.
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Make a list of all the projected expenses for each month. This should be done accurately to the nearest penny and include fixed payments such as rent, mortgage payments, utility bills and variable expenses such as food, entertainment and transport.
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Decide what can be cut back. Look at costs such as take-away food or clothing. Fixed expenses such as rent can't be cut back.
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Construct the budget so that projected income exceeds the projected expenses and therefore, in theory, you will stand to profit from the savings of the budget if it is adhered to.
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Tips & Warnings
Arrange for fixed expenses such as utility bills to be debited from your account within a day or two of receiving your monthly wages. This will ensure the bills are paid before the money is spent elsewhere.
Set a precise figure for food shopping each month. Limit how much can be spent on entertainment such as nights out to the cinema or the pub. Stick to this rigidly and avoid impulse purchases.
If you do not make cutbacks, you may struggle to pay important bills such as rent or tax.
References
Resources
- Photo Credit Paying Bills image by ne_fall_photos from Fotolia.com
