ur categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses Setting up a budget is the first step in financial planning and taking control of your money (before it controls you!) While somewhat time consuming, creating a budget is not overly difficult if you have all of your paperwork accessible. If done correctly, sticking to a budget should not be extremely difficult, either- although it may take some getting used to at first.

Before you begin, you will want to gather the following items: pay stubs for 3-6 months, check register, monthly expense statements (mortgage, loans, credit cards), and paperwork for any other sources of income. Armed with these essentials, you can sit down and create a workable budget!

How Much Money Do You Earn?

Determine your average, monthly income. You can add your net pay (money received after taxes and deductions are taken from your paycheck) for three months and divide by three in order to get the monthly average. If you have other sources of income (alimony, child support, business income, etc), be sure to calculate that income as well to get your total monthly income figure.

Create Categories

Next, go through your checkbook register and bills and create categories of expenditures. Typical categories include your mortgage or rent payment, homeowners or renters insurance, property taxes, utilities, credit card and loan payments, food, babysitters, health insurance, fitness clubs, car insurance, gasoline, cable tv, entertainment, etc. At this time, you are just writing down your existing categories, not trying to eliminate or reduce your expenses.

Once you’ve created your categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses t

l want to gather the following items: pay stubs for 3-6 months, check register, monthly expense statements (mortgage, loans, credit cards), and paperwork for any other sources of income. Armed with these essentials, you can sit down and create a workable budget!

How Much Money Do You Earn?

Determine your average, monthly income. You can add your net pay (money received after taxes and deductions are taken from your paycheck) for three months and divide by three in order to get the monthly average. If you have other sources of income (alimony, child support, business income, etc), be sure to calculate that income as well to get your total monthly income figure.

Create Categories

Next, go through your checkbook register and bills and create categories of expenditures. Typical categories include your mortgage or rent payment, homeowners or renters insurance, property taxes, utilities, credit card and loan payments, food, babysitters, health insurance, fitness clubs, car insurance, gasoline, cable tv, entertainment, etc. At this time, you are just writing down your existing categories, not trying to eliminate or reduce your expenses.

Once you’ve created your categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses

d deductions are taken from your paycheck) for three months and divide by three in order to get the monthly average. If you have other sources of income (alimony, child support, business income, etc), be sure to calculate that income as well to get your total monthly income figure.

Create Categories

Next, go through your checkbook register and bills and create categories of expenditures. Typical categories include your mortgage or rent payment, homeowners or renters insurance, property taxes, utilities, credit card and loan payments, food, babysitters, health insurance, fitness clubs, car insurance, gasoline, cable tv, entertainment, etc. At this time, you are just writing down your existing categories, not trying to eliminate or reduce your expenses.

Once you’ve created your categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses

ures. Typical categories include your mortgage or rent payment, homeowners or renters insurance, property taxes, utilities, credit card and loan payments, food, babysitters, health insurance, fitness clubs, car insurance, gasoline, cable tv, entertainment, etc. At this time, you are just writing down your existing categories, not trying to eliminate or reduce your expenses.

Once you’ve created your categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses

ur categories of typical expenses, go through and fill in what you spend in an average month in each category. Subtract your total expenses from your total income. Is there any money left over? If not, you are living well outside your financial means! If there is a small amount of money left over, we’re going to improve it by creating a budget that helps you have more money left over after expenses to increase the money available for saving.

Set Limits

After you have your expense list of categories created, go through and determine a realistic amount for each category that you think you could stick to. Obviously, some categories are fixed amounts, such as your mortgage or your car insurance, but entertainment, food, and similar categories can probably be reduced with just a little effort.

With your new budgeted amounts for all of your expenses, see if the money you have left over (after subtracting your expenses from your income) has increased at all. This is the amount of money you should be putting into a savings account of some kind for emergencies, unexpected expenses, and even vacations.

Keeping Track

Once you’ve designed your budget, you’ll want to keep track of your monthly expenses and income for a few months, to help keep yourself within your new limits. If you find that you under budgeted for a few categories that you just can’t reduce expenses for, you can make adjustments.

The idea is to quickly move extra cash from a checking account into a savings account, as money in a checking account has a way of being spent fairly quickly!

Change Your Thinking

It’s easy to become stressed over trying to maintain limits at first. If you’re used to spending money on whatever you want as fast as you earn it, then a budget is probably a huge change for you. But instead of thinking of a budget as a diet, and all of the things you can’t have because you are budgeting, think of it as a tool to get you out of debt, keep you out