2 Replies Latest reply on Sep 17, 2015 4:30 AM by JerryD

    The Monthly Budget - The Spending GPS

    Musu

      Do you ever wonder where your money goes every month? If you answered no then you probably do not have a monthly budget. Before I started using a monthly zero-based budget to manage my money I hardly understood why I was always broke just after payday. Without a monthly advance plan, I found it difficult to keep track of my money.

       

      Here is what I started to do on a monthly basis:

      1. Plan next month's budget during the current month taking into account changes in the current month

      2. List everything imaginable expense - DO NOT LEAVE OUT - trips to the restaurant, salon, happy hour, etc. these are also expenses

      3. Include my monthly savings and investments as expenses on my budget

      4. Make sure all of my anticipated income is accounted for with a zero balance on my budget INCOME minus EXPENSES = 0

      5. Adjust expenses as needed during the current month (see where you can make cuts to one expense to increase another expense)

      6. Repeat the process every month

       

      This process of budget management has helped me stay on track, pay off debt, watch my spending and of course, keep more of my money. Now I know where my money goes each month.

        • Re: The Monthly Budget - The Spending GPS
          Susanna144

          I think you have given us all a good introduction to budgeting.  The difficult part for me would be thinking of the categories at the beginning.  To help myself, I've tracked spending and found out where my money goes without a budget.  I agree that it's very eye-opening!  We used to spend about $6/person per day on food, but that's recently crept up.  I should investigate why.

            • Re: The Monthly Budget - The Spending GPS
              JerryD

              We have been doing a budget for decades. I'll try to list our categories that we track in a spreadsheet where we put in our estimates (reduced to monthly average) and then start a new column for each month to track actuals.

               

              At the bottom you see a couple of entries with "=" at the end. These are calculations of either the entire estimated or actual month or the estimated monthly minus actual monthly to allow us to see how we did. Unless things are really tight, we do not analyze these on a monthly basis. Once you have months of data, you can then do totals for 12 months or a calendar year or whatever "what if" you want to analyze with very little work. The data, once accumulated, gives you a pretty strong ability to analyze and modify monthly category estimates (or habits) if they increase or go away.

               

              After  years we added the item "OFF-BUDGET:MAJOR PURCHASES/IMPROVEMENTS" to account for those pesty expenditures that we could not anticipate but end up being pretty serious sometimes. For instance, we chose to add in a monthly car payment here since we keep our cars for a long time and this is what we call a "temporary" cost that we want to track. Similarly, a new appliance is an unusual cost. But we want to see what all of these "budget surprises" cost and to anticipate them on the average.

               

              We also created another sheet in this budget spreadsheet to allow us to track our costs for major utilities like electric, natural gas, water, etc. This allows us to see if these are getting out of control and to see if a new furnace or A/C are helping or hurting or our what playing with the temperature in the house costs, say. We have started doing a new and separate vacation cost sheet since this has become a serious cost at this point in our lives.

               

              So you see, a spreadsheet that is maintained and tweaked allows YOU to monitor and control WHATEVER is important in YOUR life.

              The budget items you track are up to you. Just keep tweaking until the spreadsheet works for you. That's the beauty of a spreadsheet!!!

               

              GOOD LUCK!!!!!!    :-))))

               

                 

              BUDGET ITEM
              HOUSE
              -PRINCIPAL/INTEREST
              -HOME TAXES (to savings)
              -MAINTENANCE (House,Lawn,etc.)
              LIVING EXPENSES
              -FOOD(All Food+Personal)
              -ALLOWANCE
              -ENTERTAIN
              -MISC(Household+Books+Repairs+etc)
              -VACATION (MEALS, TRANSPORTATION, LODGING,OTHER)
              UTILITIES
              -TELEPHONE
              -GAS
              -ELECTRICITY
              -WATER/SEWER
              -CABLE
              -GARBAGE
              TRANSPORTATION
              -TRAIN+PARKING+TOLLS
              -GASOLINE
              -CAR REPAIR (Oil Changes,Etc.)
              -LICENSES,RV LOT RENTAL
              CHURCH/SCHOOL
              -DONATION (MONTH)
              -TUITION(MONTH)
              -SUPPLIES,LUNCH(MONTH)
              MEDICAL
              -DOCTOR/DENTIST/DRUGS (MINUS INSURANCE REIMBURSE)
              INSURANCE (Dividends To Savings)
              -LIFE
              -CARS+TRAILER+UMBRELLA
              -HOUSE
              GIFTS
              -CHRISTMAS
              -OTHER
              CLOTHES
              -EVERYONE (Or Keep Individual Records)
              LITERATURE
              -NEWSPAPER
              -MAGAZINES
              -INVESTMENT
              LOANS
              -LOAN PAY BACK
              MISCELLANEOUS CHARITIES
              BUDGET TOTAL =

              +/AHEAD -/BEHIND BUDGET =

              OFF-BUDGET:MAJOR PURCHASES/IMPROVEMENTS