How to Budget & Still Have Money
- 1). Calculate how much net income you have in a month: Gather copies of your recent pay stubs and calculate you monthly take-home income. Gather copies of any extra income you receive such as child support payments, income from a second job or Social Security benefit payments. Write your total monthly income down.
- 2). Create a list of your necessary fixed expenses. Any bill you pay in the same amount each month counts as a fixed expense, such as rent or mortgage payments or insurance premiums. Write down the name of each expense and the total cost below your income.
- 3). Create a list of your essential variable expenses. Costs you have that vary from month to month count toward your variable expenses, such as your grocery or utility bills. Write down the name of each expense and the total.
- 4). Create a list of your nonessential expenses. Nonessential expenses include anything you do not need to live, such as the costs of cell phones, cable TV or dining out. You will need to estimate the total cost of some expenses, such as dining out or entertainment. Write each expense down.
- 5). Subtract all of your fixed, variable and nonessential expenses from your income. The amount of money you have left over represents how much extra money you have in a month.
- 6). Review your nonessential expenses to determine where you can lower your monthly budget. By cutting down on some of your unnecessary expenses, you will have more money left over from your budget each month. For example, you could eliminate the data plan on your cell phone or cancel the premium channels on your cable package. Repeat this process until you reach a desired level.
- 7). Track your spending for one month. Throughout the month, write down everything you purchase and the total cost. At the end of the month, divide each purchase or bill into the right category. For example, add grocery store purchases toward your grocery budget. Tracking your expenses will show you where you can cut back.
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