How to Make a Budget

A budget can help a person see where their money is going and make changes to their spending as needed. Follow this advice to create a budget.

To begin a budget look at the take home pay. This is how much a person receives in pay after taxes. If a person has a varied income they should take an average of the past year to get how much money they have to work with.

Look at the monthly expenses and how much they cost. This includes rent/mortgage payments, car payments, and insurances, groceries, utilities, gas, and other expenses. Fixed expenses will be able to keep a record of. For variable expenses take an average of how much they cost over the past year to get the figures. Entertainment such as eating out or going to the movies should also be included in this. 

All of the expenses should be subtracted from the total income that a person has. If they are losing money each month some adjustments need to be made. One of the easiest categories to adjust is entertainment. A person may need to go out a little less if they are losing money. If a person has money left over at the end of the month a savings account is a great place to put this extra money for an emergency or a large purchase. 

A budget will allow a person to see where their money is going. Everyone works hard for the money and no one wants to waste it. If a person is spending too much in one area they can make adjustments. A budget is a living document and things may change over time.  This is a good place to begin to track spending habits and make some changes to these habits to keep more money.