In desperate need of a budget?

Question

I really need to budget my money each month. I have never had to do this and have no idea how to go about it. Can someone help me with this and tell me how to do it? Thanks

Answer 1

The quickest answer I can give is to point you at the Dave Ramsey program.  You can look it up on line, and hopefully find a class near you.  Budgeting is an important part of what that program teaches.

A budget, very simply, starts out with an estimate of what you spend every month for: utilities, groceries, transportation, housing, entertainment, ...  everything that you spend money on.  If you use Quicken, or some other money management program and have been keeping good records, you have a really good start because you have some history that you can use to make good estimates.

So - set up a monthly maximum that you expect to spend for all of the catagories of spending in your life.

Compare that to what income you have.  You'd better bring in at least as much as the total of what you spend or you're in trouble and must figure out where and how to cut expenses.

Then, keep track of your spending habits each month.  When you hit a limit in a catagory, stop buying whatever it is.  Something like gasoline, you'll have to predict carefully week-to-week so you don't run out of gas money before the end of the month.

That's it in a nutshell.  Like I said, look up Dave Ramsey and get into a class.  You'll get lots of good information and instruction.

Answer 2

Sure, use excel and put your income in one column and expenses in the other.  Add up the total on each then subtract your expenses from your income.  If the number is negative then you need to increase your income or decrease your expenses.  Its really that simple.

Answer 3

Make a list of all your bills and all your income.  List your bills in order from MUST be paid to NICE to spend.  Add up the bills - that is your preliminary monthly budget.  Now add up your income and compare it to your list of bills.  If your income is more than your bills, you are okay (your will have  a little left over).  If you income is less than your bills, you need to start checking  your bills to see where you can cut back.

Let's say you budgeted $50 per month to go to the movies weekly (4 movies at $8 and $18 on popcorn) and you came up $25 short in your budget.  You could cut out two movies and popcorn and balance your budget or you could cut out all four and watch pay-per-view at $5 per movie with home made popcorn (or microwave) at $1 per packet.  Either way would save you $25 and you would be even.

You can also look at your bills and see where you can save money.  For example, if you buy a lot of ready made foods from the grocery store, you can probably save money by buying the raw materials and cooking yourself.

Don't forget to leave extra in for unexpected expenses (baby showers for friends, weddings, car breaking down).

To get an idea of your ills, you might want to keep all your receipts for a few months and review them to see where you spend your money.