How to create a monthly budget

piggy-bankBills, bills, and more bills; isn’t it fun being an adult? Do you feel like you are constantly living paycheck to paycheck, working hard each day just to make ends meet? Does it seem your money is disappearing before your eyes? Welcome to the reality that millions of Americans face. Despite how desperate your situation may seem or be, chances are you make more than enough to get by and then some.

This is not to say that no one is struggling or living in poverty, because these problems are extremely prevalent, but rather that a majority of people simply do not know how to budget well. The way to get out of debt and save is to have a solid plan of attack.
You need to know exactly how much income you have and where those dollars are going each month. Anything left over should be stashed in a savings account. This is going to require a lot of work on your part initially, but the long term benefits make the time investment well worth it.

Money management for beginners
Calculate your net income (the amount after taxes are taken out) to have a clear idea what’s available. Make a list, preferably a digital spreadsheet, of all your current living expenses. This could be extensive, but you need to list everything. This will likely include housing costs (rent or mortgage payments), utilities, internet, food, fuel, automobile expenses (loan payments, insurance, etc.), childcare costs, student loans, credit cards, and personal bills. Do not, we repeat, do not list miscellaneous or entertainment expenses yet, for this allocation should come only after the essential bills are taken care of.

Once everything is in place, check to see if there are any expenses you could either eliminate or cut back on. Cable TV and expensive car payments are not a necessity, so figure out what you need to do to create a disposable income surplus.

Set a reasonable entertainment expense budget and cap that figure; this is where many people get into trouble financially. Your income minus your expenses = disposable money. If you do not have a problem living frugally and have pay close attention to the numbers, expect to watch your bank account grow!

Leave a Reply