Do you ever find yourself
running out of money before you run out of month? It
happens. Whether it's the result of unexpected expenses,
inconsistent income flow, or simply overspending, a well planned
budget can help you get back on track.
- Total your earnings.
Calculate how much money you expect to
make this month after taxes but only include income sources that
you know you can depend on.
- Calculate your monthly
This list should include all of your
regular monthly expenses, including any money that you spend on fun
things like eating out, hobbies, and any minimum payment s that you
have to make toward your credit card.
- Subtract monthly expenses from
This is the amount you can expect to have
left after covering all your regular monthly expenses.
- Subtract extra expenses.
Review your plans for the upcoming month -
scheduled car repairs, medical or dental bills, gifts, trips,
parties. Subtract your extra expenses from Step
- Build in a cushion.
Look at how much is left after covering
your anticipated expense and decide if what remains is enough
cushion against unexpected expenses. A good rule-of-thumb is
a 10% margin for unexpected expenses.
- Rework your budget.
If your budget comes out on a negative or
deficit, review your monthly expenses again and look for areas to
cut. Keep at it until your budget works.
- Invest in yourself.
Use any remaining cash to pay down debts
or to build up savings and investments.
Use a computer to create your budget.
By automating your budget you can quickly and easily review and
track your monthly income and expenses.