The road towards financial stability begins with the ability to balance expenses against income. By creating a plan for spending and saving enables you to determine if you have enough money for the lifestyle you desire or the ability to achieve specific goals. Setting up a budget begins with outlining the specifics of your current situation by using a budgeting worksheet.
How to Set Up a Budget:
- Total your income. Start by listing your “take home” income, which is the amount you have after taxes.
- List your expenses. Chart out specific reoccurring expenses such as rent/mortgage, utilities, cell phone, and loans or credit cards. Set aside a portion each week for utilities so that there will be enough in your savings account when the bills come due. You can even set up specific savings accounts for each of your bills and transfer money from your paycheck to these savings accounts after each pay. Don’t forget to calculate living expenses such as food, household goods and toiletries, and transportation.
- State your specific goals. Keep in mind the little pleasures such as dinners out, movies, and special occasions to longer-term items such as a house, car, or vacation.
- The bottom line. After subtracting your expenses from your income, you will be able to see the amount of money you have left over to divide among your goals. This is the money you have to spend or save as you wish. If balance after expenses is negative, look for ways to cut down your monthly expenses such as changing your cable/internet subscription or cell phone plan.
Begin with this simple Budgeting Worksheet: Budgeting Worksheet
Additionally, these articles may help you along the way in budgeting successfully.
Have more questions? Sit down with one of the financial specialists at Diamond for insights on setting up a budget. Plus members can request a Loan Health Check-Up where our loan consultants will review your credit and help discover opportunities to save you money.