I need help setting up a budget.

iVillage Member
Registered: 10-16-2007
I need help setting up a budget.
3
Thu, 01-08-2009 - 12:17pm
So I just started keeping track of our spendings, and earnings. I am playing around with different ideas on how to make up a budget but I always get lost. Any ideas? Helpful hints? Thanks Liz
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iVillage Member
Registered: 07-05-2006
Thu, 01-08-2009 - 1:01pm

Start with listing your income. Then, list all the things you normally pay each month, like your bills. List all your bills and how much you pay. Look at past statements so you can be accurate. If the bill fluctuates each month, try to get a 3 month average. And always aim higher on these bills so you're never stuck with not enough. For example, my electricity payment ranges anywhere from 117 -217 during the year depending on if it's the cold of winter or heat of summer. I hate to be caught off guard with this payment because it is automatically withdrawn from my bank account so I budget 200 dollars for this and if it is one of those months where it's only 140, then that's 60 dollars I can put towards debt or savings. This is an extreme example because of the huge fluctuation, but you get the idea.

Once you have all your monthly bills listed because those are known expenses, then start listing the other expenses that are obvious...groceries and gas. We all buy these things every week so we pretty much know what we're going to spend. I budget 150 dollars a week for groceries. I have a family of 5 and this includes household items like toilet paper and diapers. If I don't use this money, then It goes towards savings or debt, but I like to over-budget. Another example...next week we are doing a holiday get together with our friends. We are each cooking a few dishes so I know that I'll need extra money for groceries that week. The 150 covers those type of things as well. Most of the time, I only spend 110 on groceries. And each week I know that we each fill up our cars once and that costs about 36 dollars in gas.

After those expenses that are the knowns, start brainstorming on other things you spend money on, like clothing, gifts, entertainment (movies, eating out...) As you track your spending you'll be able to add more categories to this and maybe trim some categories as well. A budget is a work in progress. I still don't have mine down perfect yet. I try to be lenient because I know that realistically I'm not going to spend only 20 dollars a week eating out. I try to keep a budget that works for me because otherwise, it will just be numbers on a piece of paper and not something I can follow.

iVillage Member
Registered: 11-14-2008
Thu, 01-08-2009 - 3:42pm

Hello,

You will be happy with yourself you have made the decision to do a budget. Abby gave a very good description but I want add a few points. A budget is a guide and it takes about a year(yes a year) to add all the lines you need in it to come out to zero at the end of each month. It takes a year because it takes you through all the seasons and all the events that happen in one year. And remember to add in lines that you do not pay monthly as well. Ex--we pay for property taxes once a year but we still take a portion from each check each month and put it in savings until it is due. That way you have the money to pay it when it comes due. I like excel. We list our income per month in black. Then each expense goes in brackets and gets deducted from the sum at the bottom of the row. If you have left over you can put in a debt repayment line or a saving line(or both or efund or whatever you want really) with a number in it to make it all come out to zero at the bottom. Or you can use a misc line with a 10% buffer for all the surprises in life.

Example for a month:

Income: 2000
Expenses:
Mortgage (800)
Electric (200)
Groceries (400)
phone (40)
cable (60)
Entertainment (100)
Property taxes (300) Per month to be put into savings until due
Debt repay (100)
Total 0

This is just a small example. My budget has about 40 categories approx??

And once the year is up, you might have to go back and change things. Such is life and life changes. Incomes change, priorities etc. It is always a work in progress but lets you know where you stand. And that is the beauty of a spreadsheet, but you can do it on paper as well.

Good luck



iVillage Member
Registered: 05-20-2005
Thu, 01-08-2009 - 6:44pm

I do my budget per pay period (every two weeks).

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