How To Make a Budget
Posted By: BigGame; Category: Miscellaneous; September 13, 2009
Author Dan Rugg; Tags: Money Saving, Budget;


(5.0 Ratings)
Ever wonder how to make a budget and stick to it? Well here are some simple steps to see where you stand and what you can do to save yourself money you didn't know you had.
Gather. Gather together all of your monthly bills statements for the last month. This includes any bills that are automatically taken out of your bank account such as mortgage or loan payments and collect pay stubs for each contributing member of the family.
See what you make. Using a note book or a computer build a chart. Make one heading Income and under this heading put 2 sub-headings, Source (who makes the money) and Amount (how much it is net NOT gross). At the bottom of the Income section put the total Income brought into the house.
See debts. Under the Income section skip a few lines and put the heading Credit Debt. Under this heading make 4 sub-headings, Source (who the creditor is), Amount Owing (What is the total amount you owe), and Minimum Monthly Payment (what you need to pay each month to keep your credit in tact. I like to pay at least $25 more than necessary to help pay down the principal if my budget allows) and finally Notes (This is where you can put information about what the debt is tied to ex. BMO = Mortgage). Under each heading start to categorize who your creditors are and what you owe them, this can be an eye opening experience! At the bottom of your list put the total amount you owe under Amount Owing and the total amount you need to pay each month under Minimum Monthly Payment.
Household Expenses. Leave a couple lines between your Credit Debt section and place a new heading, Household Expenses. Under this area you will create 3 sub-headings, Expense (What bill it is or where the money is going ex. Cable, groceries, pocket money), Given Amount (How much the bill is each month or how much you can afford to allot to that area), and Description (what you are getting for the money you are spending ex. Basic phone and high speed internet for $49.99). At the bottom of the list put the total amount allotted for house hold expenses.
Moment of Truth. At the bottom of your page make 2 columns, one Categories and the other for Totals. Under the first column put Income, Credit Debt, and Household Expenses. In the second column put the totals from the bottom of each category beside their heading. Now subtract the Credit debt and Household Expenses from your Income. If you are left with a negative number than go to step 6 and continue through. If you have a positive than this can be used as your savings or to help you pay off your creditors that much faster (I like to split any left over half to creditors and half to savings).
When you have a negative. Start to look at what your Household Expenses are and where you can save. Do you really need that satellite dish? Would you need to pay to get out of it? How many bank accounts are you paying fees on? Most of us spend oodles of money on things we don’t need. I was paying for cable to watch 3 channels and then when I did my budget I found it was cheaper to lose the cable and boost my internet to watch my shows online when I wanted to with no commercials. Voicemail on a home phone is not necessary at all when you think you pay about $12 a month ($144 a year) for it and you could just as easily pay $35 one time to get an answering machine (that is a savings of $109 a year). Groceries are another area you can save at. Most of us buy name brand products because we think they are better but did you know that 9 times out of 10 the generic brand can be better for you, have better flavor and are often prepared in the same factory as those name brand items. I used to pay $26 for Similac formula for my daughter and then I discovered that I could get 2 cans of Wal-Mart’s Parents Choice for $30 and all the nutritional content is the same except the Wal-Mart brand has more Iron that babies need. Who knew? If you don’t believe me do the research and go to your grocery store and price out what you normally buy and then compare it to the store brand or better yet head over to the Superstore because often they are even cheaper Yet.
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  • posted by: DPetch; September 13, 2009 10:23:29 PM

    He is right! The store brand is way better and easier on the wallet. Thanks for posting this. I bet this will help alot of people save some money and open their eyes to their own financial situation.

  • posted by: ALBrowning; September 13, 2009 10:18:02 PM

    WOW! This is so much easier than I ever thought a budget could be. Great read and i will definatly be making my own budget in the future.

  • posted by: cjrugg; September 13, 2009 10:11:09 PM

    I found this to be very interesting and insightfull. I apreciated the examples and how in depth and detailed everything was. Very easy to read and understand and with todays tough times everyone could use a budget.