Creating a Monthly Budget for Beginners
Step One: Calculate Your Income
The first step when creating a monthly budget is to calculate your income. This includes money from your job, investments, and any other sources of income you may have. Make sure to include any bonuses or extra income you may receive each month. Once you have a total of your monthly income, you can move on to the next step.
Step Two: Calculate Your Expenses
The next step is to calculate your expenses. This includes anything that you spend money on each month. Some examples of expenses are rent, utilities, groceries, gasoline, insurance, and entertainment. Make sure to list everything you spend money on each month and include the total amount. Once you have a total of your monthly expenses, you can move on to the next step.
Step Three: Calculate Your Savings
The next step is to calculate how much you can save each month. This includes any money that you put into savings, retirement, or any other investments. Once you have an amount for your savings, you can move on to the next step.
Step Four: Calculate Your Remaining Balance
Once you have calculated your income, expenses, and savings, you can calculate your remaining balance. This is the amount of money you have left over after all of your expenses have been paid. This amount is what you have to work with for the rest of the month.
Step Five: Allocate Your Remaining Balance
The last step is to allocate your remaining balance. This means deciding how you want to use the money you have left over each month. You can use it to pay off debt, save for a vacation, or buy something you want. It’s important to be realistic when allocating your remaining balance so you don’t overspend.