Many people want to save money and make a budget, but they think that it is complicated and they need an expensive software program or an accountant to budget. This is so far from the truth because all anyone really needs to set up a budget is, simply, a pen (pencil), a notebook and a calculator (this makes things easier but is not necessary).
First things first, you will need to write down all of the money that you have coming in the house (income of everyone) and then make a list of all the money going out (the household bills). The list below provides a list of most households expenses.
Monthly Expenses (for the average household)
Utilities $250 (includes gas, water, electric)
Car Payment $150
Gas for car $150
Once you get your visual of the money coming in and the money going out completed, then it is time to set up your budget. Decide how you want to do your budget. For instance, some people like to make a weekly budget, some people like to do their budgets bi-weekly, and some people like to make their budgets on a monthly time frame. It just depends on how often you get paid.
Now it is time to get to making your budget. You know when you want to pay bills and you know what you have coming in and going out. So, the next step is to add to your visual. This means you should write down, next to each expense, when it is due. For instance, the mortgage payment might be due on the 5th of every month. Write down 5th next to the mortgage expense. This helps you when you start actually writing down your budget.
Suppose you have a budget of $600 on a bi-weekly pay schedule? How do you get all of the bills paid? Below is an example of how to do this (based on getting paid on the 1st and 16th every month).
Budget on a bi-weekly schedule
October 1st October 16th
Mortgage $175 Mortgage $175
Groceries $100 Groceries $100
Utilities $150 Utilities $100
Car Payment $75 Car Payment $75
Gas $80 Gas $70
Total $580 Insurance $75
It is as simple as that. All budgets use simple math. If you know how to add or subtract then you know how to create a budget. Don’t spend oodles of money on an accountant or even on an expensive software program. Make your budget yourself.
*Note: all of these examples within this article, are just that–examples. I was merely trying to show you how to create your budget. Please do not think these prices are set into stone. You will have to figure out what works for you.