One of the foundations to financial security is creating a budget spreadsheet and sticking to. Making one is not too difficult; it’s living within the means of your budget that is hard. In this post, I’d like to briefly go over some ideas on what you might have in your budget spreadsheet and how to budget your money.
Here are some steps to creating your budget spreadsheet:
- Calculate what your family’s average total wages are after taxes. Realizing this might change from month-to-month, just get as close as you can. Calcuate any other income you plan on receiving (perhaps through stocks or gifts), and then your total estimated income.
- Now write down all the categories/places in which you spend money each month and how much you intend to spend in each one. Examples might include the following: food, mortgage or rent, utilities, transportation, debt payments, insurance, medical, clothing, school expenses, other, etc.
- Include a section for savings. It’s always important to be saving each month, even if it’s not a lot.
- Calculate what you anticipate your total expenses to be
- Then subtract your expenses from your income. If you’re left with a negative number you need to see what you can cut back on.
A point I would make here is to be sure to budget some money for every item, even if you have no intention of spending that money. A good example is medical. You may think, “I have no reason to go to the doctor this month so I won’t budget any money for that.” But when little Susie gets a cold and you didn’t set money aside for a doctor visit, then you are in trouble. If you don’t use that money, transfer it over to next month’s budget or put it into savings.
Lastly, you must be disciplined. Creating a budget worksheet will never help you if you don’t do your best to abide by it. I hope these steps are helpful in creating your family budget and staying financially stable.
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