I have always kept plenty of money in my accounts and never had a problem with overdrawing checks, but we always seemed to spend every dime we made. As I mentioned previously when my wife lost her job, I set out to do a budget and find out exactly where we were spending our money each month.
If you have a computer with Excel you can either set up your own spreadsheet or you can go out online and get a budget template at either Google or Microsoft. I found the one below at Google that is similar to the one I created for myself, but if you are going to download one take your time and find one you like.
I preferred to make my own which you can do also with the following steps.
- 1. The beginning line needs to be for income. Have a separate line for income from each person so you can accurately keep track of what comes in from each job. Once you have lines for each type of income, total them so you know the total expected income coming in each month. I prefer a budget that has columns for budgeted amounts, actual amounts, and a variance column so you can see where you saved money and where you overspent.
- 2. Then you begin with the expenses starting with the most important items. Most people would begin with either their mortgage payment or rent. Then all of your utilities that you have to pay each month. I would then total these expenses into a subtotal.
- 3. Then I will have food expenses and I will break it out by groceries and eating out and continue to add additional expenses as you go down you can and create a subtotal at the bottom.
- 4. What you will do at the beginning of each month is input the expected incomes and expected expenses into the budgeted columns for each category.
Remember that the purpose of a budget is to track and target your spending and know where every dollar goes. You want to budget every dollar down to zero. So if you have anything left after your expenses it either needs to go either as an extra payment to any debt you have like credit cards or as an extra amount put in savings. This way if you have an unexpected expense you have to take the money out of another category.
This is not an easy process and it will take you time to get it dialed in, but do not give up on this quickly it does work and will help you. It took me and my wife 3 months to get a budget that worked for us. I knew how much gas we were using each month, and she knew how much we were spending no food, but eventually we came together and made it work with each of us being able to save money from the other ideas.
If you need a little help finding ways to save money go to TheSimpleDollar.com or Kiplinger put out this article last week Save $50 a Day (and Feel No Pain).
If you have problems sign up and comment and I will try to answer your questions and help.
Good luck.
