Here are directions for creating a budget for the next six months. That´s long enough to see if your planning is working. A few weeks in, you may want to make some adjustments here and there. Then, toward the end of those six months, review how you´re doing. You may want to use the same basic plan for the next six months, or you may want to take another look and make some revisions.
- Record the income you receive now from the listed sources in the "Currrent Monthly Income" column.
- Under "Salary and Wages" type in your net income, which is what you have available to spend after taxes, etc. are taken out of your paycheck. Your gross income is what you earn before taxes are withheld.
- Now click in the "Total Monthly Income" column to see your monthly income total.
- Record what you are spending now on various expenses (Essential and Discretionary) in the "Current Monthly Spending" column. (While you live at home, you´re probably not responsible for rent, utilities or certain other costs. But it´s a good idea to be aware that these are expenses you can anticipate for the future.)
- Now click in the "Total" column to see your monthly expenses total.
- Subtract your "Current Monthly Spending" from your "Total Monthly Income" to determine if you have to adjust your spending to live within your income.
- Be sure your budget includes money for savings.
- If your income exceeds your expenses (which is called being "in the red"), you´ll either need to find a way to increase your income or decrease expenses to make ends meet. Re-do the worksheet until you have a balanced budget!