By creating a personal budget worksheet, you can take control of your finances and start saving extra money.
What is really important is to start.
Whether you use paper and pencil or a computerized budget spreadsheet does not matter.
Creating your personal budget worksheet can be done in 6 simple steps.
1. Write Down How Much Money Was Spent Last Month
Write down how much money you spent last month. First, make budget categories like electricity, water, home telephone, cell phone service, food, car and housing payments, medical costs, clothing, car maintenance, entertainment and savings. As you complete this, you might be surprised by your spending habits.
2. Figure Out Next Month's Income
After you have recorded your living expenses, you need to find out how much income you will earn next month. This is a cinch if you are paid the same amount each month. However, if your income changes each month, add the past 6 months and then divide the total by 6 and use this amount.
3. Write Down Fixed Costs
Fixed costs are ones that remain the same like mortgage and car loan payments. Add these to your budget with labeled as a fixed expense. They need to be labeled to distinguish fixed expenses from variable expenses, or costs that change.
4. Estimate Variable Expenses
Make a list of all the expenses you believe that you will have next month. These are changeable or variable expenses that you can decide how much to pay for. For example, you can choose to spend more or less on your electric bill, by changing how much electricity you use. One of the hidden benefits of a budget is that you will find ways to reduce utilities and other variable expenses.
5. Subtract Expenses From Income
Add up all your fixed costs and expenses for next month. Subtract this total from your next month's income. Are any expenses interfering with your financial plans?
6. Find Out What You Really Spend Money On
For one month, record everything that you spend money on. Nothing should be left out. This may be tough in the first month, but in a couple of months it can become a habit. Be sure this information is included on your worksheet under the appropriate budget categories.
As you continue to do these steps, you will get more and more control over your money.