Making a budget once you have gathered all of your information is still not easy.
Remember, before now you were gathering historic information, now you need to review your numbers and make some decisions.
Consider this your first draft!
Use this free budget spreadsheet to fill in your categories and track your income and expenses on a weekly basis.
Taking the information gathered from your four month worksheet and begin filling in your income and inflows.
Remember Rule #1 on income: budget only consistent, guaranteed income.
Next, fill in your fixed and variable expenses.
When reviewing your monthly expenses and deciding how much is spent in each category, you will find some variation from month to month. You need to think about whether or not to use a simple average, but before you do read below.
A word of caution on averages:
Now subtract your total fixed expenses and variable expenses from your income.
Once you have done the math, you now know your number. Ideally, your net number should be zero because you are putting all of your excess income into Savings.
Do you have a positive number?
Great, your positive number is how much more you can use to save or invest for your future or use to accelerate paying off debt and start debt free living .
Now that you have your playbook, track your numbers each moth to keep on winning!
If your number is negative don't despair, stop here and take a deep breath.
The reason for making a budget is to have a tool to better understand your finances and to determine where your money is going to be spent.
Making a Budget Practice and Exercise
Review your results:
Does your spending really reflect where you want or need to spend in the future?
Are you financially accomplishing the goals you have for your family's future?
Have you been spending within your means, spending less you earn?
Now for the hard part - and for some it is a paradigm shift.
You may find when tracking your income and expenses that your numbers are wrong. It's okay to make changes. It may take several months of living on your budget to get the numbers right.
When tracking your income and expenses you may find your numbers are wrong. That's OK. Make the changes to fit the facts.
It may take several months of living on your budget to get the numbers right. But once you do, you will be starting to take control over your family's finances.