- At the top of the first page, calculate your income. Net Income = your earnings after income tax and withholdings are deducted. Add additional income sources such as child support or rental income.
- The rest of the first page is a list of basic monthly expenses. Enter your family’s estimated amount in the blue column. Use blank lines for additional essential expenses.
- Total the expenses on page 1 and enter that figure into the space labeled Total Essential Expenses.
- Page 2 is a list of less crucial expenses. Again, enter your family’s estimated amount in the blue column and use blank lines to add additional expenses.
- Total the expenses shown on page 2 and enter that figure into the space labeled Total Other Expenses.
- Transfer the Total Essential Expenses figure from page 1 to the space labeled Total Essential Expenses on page 2.
- Add Total Other Expenses and Total Essential Expenses. Enter the total in the space labeled Total Living Expenses
- Subtract Total Living Expenses from Total Net Income.
- If the amount is positive, you are living within your means and should consider paying down debt or investing the ‘excess’ money in a savings account or CD.
- If the amount is negative, you are spending more than your income.
- Review each item in the expense list to determine which ones might be reduced.
- Write the reductions in the peach column labeled Changes Needed.
- Subtract the figure in the peach column from the figure in the blue column and enter the result in the purple Planned Budget column.
Now that you’ve built your budget, monitor your expenses for the next month. Make modifications as necessary.
Continue this process each month to remain aware of spending habits.
Rosemarie Groner and her husband found themselves $30K in debt with their finances in disarray, and managed to turn it all around thanks to her self-developed 90 Day Budget Bootcamp. For those struggling with how to make a budget and stick to it, her blog is a wealth of information. Check it out! Continue reading
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If you’re a young parent drowning in debt, or anyone else trying to navigate rough financial waters, check out Andy Hill’s Marriage, Kids and Money blog, podcast and online platforms. He focuses on achieving financial wellness while raising a family, and his advice is relatable to anyone. Continue reading