On your financial journey, every new month, or major change in your life requires a new budget.
A budget is a spending plan that tracks how much money comes in and goes out. It gives you control over your money.
Many people find the word ‘budget’ restrictive. Feel free to call it what you want. Like most couples, we struggled with having money conversations. So we decided to call our budget meetings our ‘financial dates’. For us, that took the ‘being called into the office’ feel out of it and made us want to show up. Find what works for you.
There are a lot of apps that help you build and maintain your monthly budget. The great thing about apps is they are easily accessible. You can reference and update your budget on the go. We did realize however that we loved handwriting our budgets, but also wanted the convenience of having on the go.
So we created a Fillable PDF budget that we could print and update as needed…win-win!
Our goal is to create our budget before we spend any money. For months we failed to do that, we ended up spending more than we planned, and we seemed to be making financial decisions without properly thinking them through. We are committed to creating the next month’s budget a week before the previous month runs out.
Use these guidelines and our template to create your monthly budget
1. Determine your monthly income
This is income that you earned after tax deductions and other deductions like 401K, Medical etc. Include other money you have coming in.This includes bonuses, overtime pay, merry go round, child support etc.
2. Write down all your projected expenses for the month
Expenses detail how you anticipate spending your income. Items such as your recurrent bills, what you pay on debt, what you put into your savings.
3. Substrate your expenses from your income
The goal is for the income and budgeted expense be zero. That every dollar on your budget is accounted for.
If you end up with a negative balance, you have more expenses than income. Think of cutting back on the expenses, or increasing income.
If you end up with a positive balance , you have more income than expense and you have more money available. You can consider applying the surplus to debt repayment or savings.
4. Keep track of your budget and review your progress
In the middle of the month, compare how much you budgeted and how much you have spent. Are you staying on track? Do you need to make changes, or adjust your spending?
Review the expenses with household members.
We learned that to meet any of our financial goals, consistency, commitment and being accountable are very important elements . Being consistent in the small things proved more fruitful than trying to score one big win.