Published: October, 2019

Though it may seem overwhelming at first, budgeting will help you make knowledgeable financial decisions in the years to come.

Create a budget worksheet

A monthly budget will help you manage your money and outline funds available for spending each month. To get started, download our budget worksheet. You can edit this worksheet as needed to fit your lifestyle and habits.

Determine your monthly income

Your income is anything that brings in money. Examples include salary from jobs, monthly child support or a social security check. After determining your monthly income, record it in your budget worksheet.

Determine your monthly fixed expenses

Fixed expenses stay the same from month to month. Examples include rent, a monthly cell phone bill, monthly car payments, and insurance. Recording fixed expenses in your budget worksheet is easy since they stay the same every month.

Determine your monthly variable expenses

Variable expenses change from month to month. Examples include the grocery bill, gas, entertainment and dining out.

To help determine how much you should allot on average for each variable expense category in your budget, we recommend you keep track of your spending habits for a couple of weeks. Record every penny you spend and how you spent it – whether you paid with cash, check, debit or credit card. Also, begin to keep your receipts so you have an accurate record of your spending. From your recordings, you can determine the amount you spend on average for each variable expense.

After analyzing your variable expenses, record the amount you think you will spend on each variable expense under the “Budgeted Amount” column in the appropriate categories in the budget worksheet.

Tweak your budget

After inserting your income and expenses into your budget, you will notice one of three scenarios. You can quickly determine which scenario you fall into by observing the “Cash Flow” box on the spreadsheet.

  • Negative Cash Flow. If your total budgeted costs (expenses) are greater than your total income, then you have negative cash flow. To fix this, you should lower your variable expenses.
  • Positive Cash Flow. If your total budgeted costs (expenses) are less than your total income, then you have positive cash flow. You can spread the additional money into other categories or increase your savings category to start establishing a rainy day fund.
  • Flush Cash Flow. If your total budgeted costs (expenses) equal your total income, then you have a flush cash flow. This means that you have successfully created your budget.

Maintain your budget

Every time you spend money during the month, record the expenditure in the “Actual Costs” column under the appropriate category on your budget worksheet. The goal is to only spend what your budget has allotted for.

Quick Tip: By observing the “Difference” column for each category, you can keep track of how much money you have left in each category to spend for the month.

Analyze your budget at the end of the month

At the end of the month, analyze your budget. Observe the difference in your “Total Budgeted Costs” versus your “Total Actual Costs.”

  • If the total difference is 0, you have successfully stayed within your budget for the month.
  • If your total difference is positive, you spent under your budgeted costs for the month.
  • If your total difference is negative, you spent over your budgeted costs for the month. Sometimes this occurs if unexpected expenses emerge. But try the next month to only spend what has been allotted for in your budget.
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