How do you write a budget plan

Instead of viewing a budget as a negative, you can view it as a tool for achieving your financial goals.

Adjust Categories Based on Reality Life is full of surprises.

budget plan worksheet

Decisions vary from person to person. Minimum loan payments. This is an area where you might find opportunities to cut back. So, if your business does better than you forecasted, you can use the extra funds to increase variable spending enabling you to grow faster.

Budget plan template

Do this by subtracting your monthly expenses from your income. Your budget is a tool to help you, not a straitjacket to keep you from enjoying life, ever. While working as a freelance blogger, I decided to finally make the time to take a close look at my expenses. Get the easy money first. This should be fairly simple to do, as long as you have stopped incurring additional debt in the short term. Know What You Owe Determining your monthly recurring debt payments should be your next step. Next list all your variable expenses—those that may change from month to month such as groceries, gas and entertainment. If your employer offers a match, contribute at least enough to grab the maximum. The best way to figure out where you can cut from your expenses is to track your spending and record every expense for a month. A personal or household budget is an itemized summary of expected income and expenses for a defined period of time, typically one month. Record spending and track progress The best way to stay on top of your budget is to record all of your expenses and income. With a budget, you can begin to prioritize your spending and better manage your money and financial future. The discipline and associated knowledge that you are making good long term and short term financial choices will provide you with a great deal of comfort, and will take you from living paycheck to paycheck to being able to see the long term results of your disciplined savings and financial planning.

In short, I was spending money on the things I needed and wanted without determining first whether I could truly afford them. For hourly employees or those who work in a business where income may rise and fall unpredictably, this can be much more difficult.

A budget gives you that big picture. For me, this number was an eye opener.

Budget calculator

Your unpaid unsecured debt, in total, equals half or more of your gross income. For students, one suggested amount is allocating about one-third of income toward long-term savings deposited in a savings account , one-third of income for short-term savings, and one-third of income for spending now. Credit card and bank statements are a good place to start since they often itemize or categorize your monthly expenditures. This will show you where you did well and where you may need to improve. If you want to be extra conservative, you can choose the lowest monthly amount you have earned in the last year, which will hopefully provide you with a worst case scenario. Step 5: Pull It All Together The first four steps of this post detail the elements of a good business budget, so the last step is simply pulling it all together. Record this total income as a monthly amount. Pro Tip: Are you currently paying off student loans? Pro tip: If you want the convenience of an online budgeting tool but like the simplicity of an Excel document, you might want to try Tiller. The categories can be as general or as specific as you want them to be. Once you have an established budget, you will want to keep it in check. If you are self-employed or have any outside sources of income, be sure to record these as well. When I built my first budget, I had a negative net worth. You might be surprised at how much extra money you accumulate by making one minor adjustment at a time.

Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out, and gifts, to name a few.

These are regular monthly bills such as rent or mortgage, utilities or car payments.

How to make a monthly budget

A monthly music subscription, however, may count as a want. Write down a list of all the expected expenses you plan on incurring over the course of a month. Share your best personal budgeting tips in the comments below. A personal or household budget is an itemized summary of expected income and expenses for a defined period of time, typically one month. Create a Business Budget in 5 Simple Steps Have you ever evaluated where every dollar of your budget goes? Make note of this information as it will become important in determining your net worth and the best use of your capital in the future. Email Creating your first budget can be extremely overwhelming.

When I built my first budget, I had a negative net worth.

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Create a Business Budget in 5 Simple Steps