Making a Monthly Budget

Before you can take control of your money, you’ve got to actually make a budget.  For this, you will need your bank statement(s) and a spreadsheet.  If you have more than one bank account, make sure you have them all available to you.  This could be the printed statement that the bank mails you or you can simply log into your bank and download.  I recommend getting at least 3 months worth for each bank account.

There are tons of templates on the web for a budget. Personally, I recommend using Google Sheets because it’s free and works very similar to excel. Copy your bank statement line by line into the spreadsheet and you can then go back and categorize each line.

Before we go through the statements, let’s look at some basic categories.

Housing: This would be your mortgage if you own your home or rent if you don’t.  This could also include things such as HOA fees and pest control, maintenance plans, landscaping, snow removal, etc.  Anything that can be described as taking care of or paying for the roof over your head.

Utilities:  This would include your phone, internet, gas, electricity, water and trash.

Transportation: Gas, parking, vehicle maintenance, car washes, bus pass and taxi cabs.  This could also be bike expenses, scooter expenses and carpool expenses.  If it gets you from point A to point B, it probably belongs here.

Groceries: Food that you buy.  This can also be dining out.  Whatever you spend on eating should be included.

Child Care:  Daycare, babysitters, clothing, toys and anything else you would need to take care of your child.  

Pet Care: Food, treats, toys, clothing, vet care, grooming and anything else your pampered pet may need.

Entertainment: Going to the movies, renting movies at home, video games that you play on your pc, gaming console or phone, concerts, etc.  Just about anything you do for fun, either alone or with others.  Some people put dining out in this category.  Others include their streaming services like Neftlix and Hulu. 

Personal Items: This is where the clothing, salon, beauty and other personal items should go.

Loans and Credit Cards: All credit cards, car loans, student loans and unsecured debts.  If you borrow money from your sibling and you are paying them back over time, it should go here.  

Memberships and Subscriptions: Are you a member of any clubs?  Gym? Something for work? Do you get magazines delivered?  Maybe the newspaper?  Whether it’s printed or something online it should go here. Yes, this can include those monthly subscriptions to games.

Savings and Emergency Fund: If you routinely save a percentage or a set amount, it should be accounted for here.

Some other categories might be: Retirement, Donations, Travel.

This is your budget and I want to make this your own.  What I’m giving you here are guidelines to get you started. You can and should customize this budget however you need to.

Now for the tedious part, categorizing expenses that you’ve already made.  By going through your statements, you should be able to capture each and every significant transaction that happens in your life.  I prefer to go through multiple months as there are subscriptions that come out once a quarter.  Heck, some are even annual.  You can use this first tab to list each expense.  Make columns for Category, Date, Description/Name and Amount. You can certainly add any other details you wish. 

Once you have gone through at least a month’s worth of expenses, you should have a pretty good idea what you are spending your money on.  It is said that you should have 70% of your take home pay for living expenses, 20% for debts and 10% for savings.  You may find that your budget doesn’t come close to that, but it is something you can strive towards.  There are a lot of folks that think your living expenses shouldn’t be more than half your take home pay, with the other half going into savings.  There are quite a few ways to make a budget work and I’m confident you will find yours.

Income is next and should go really quickly. Tally your take home pay, this is what is deposited each payday.  If you have any other income, you can also list it here. Some examples could be child support, sales commissions, pension payments, etc.

Hopefully, your total expenses are less than your income each month.  Don’t be too stressed if its the other way around.  That is probably one of the reasons why you are here in the first place.

Congratulations!  You have just made your first budget!  For a lot of us, this will need more work.  Right now, you’ve identified where your money is going and how much you are spending on the different areas of your life.  You may feel that you need to make some changes in how you spend your money, you may feel like you don’t know where to start.  That will be coming up next.

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