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Exercise - Creating a Budget - Use the following sheet to set up a budget.
Four Basic Steps To Creating A Successful Budget
Budget Item Budgeted Amount Amount Spent Difference
INCOME:
Step 1. Add up your income (the money you are going to earn).
Salary (self/spouse) after tax
Money you earn can come from a paycheck, state services, child support, Support / assistance
tax refunds, rebates, or any other money you receive during the month. Other
Step 2. Add up your estimated expenses (the money you are going to spend). INCOME
There are two types of expenses to think about: fixed expenses (the same cost each month) FIXED COSTS (Amount stays the same)
and variable expenses (the cost changes from month to month). Rent or Mortgage
Step 3. Subtract your expenses from your income. Phone
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For example, if you earn $1,200 per month and you spend $1,000 per month, you will have TV/Internet
$200 left over. Insurance (home/apartment)
If you spend more than you earn, then you are spending more than you can afford. Stop and Insurance (health)
see what expenses you can live without. Keep the things you need and get rid of the things Insurance (car)
you want. Child Care
For Evaluation Only
Step 4. Track the money you spend and create a plan for spending in the future. Car Payment
Keep track of the money you actually spend during the month. Debt Payment (credit cards, loans, etc.)
See how close you were to your budget and make changes for the next month. Other FIXED COSTS - Subtotal
It takes time to create a budget, but if you do it right, you will begin to understand where you VARIABLE COSTS (Amount changes)
are spending your money. You will also learn how to change your habits so you can have more to Food
spend on things you want. Fuel / Gas
Exercise: Create Your Budget Electric / Heat
Water
Use the form on the next page to create a budget to track your income and expenses for a month. Household Supplies
In the Budgeted Amount column, list the amount you expect to earn in the income section, and Clothing
the amount you expect to spend during the month for each Fixed and Variable Costs. Public Transportation
Repairs and Maintenance
During the month, keep track of your expenses and receipts on a separate sheet. List
any unexpected costs as you go through the month in the Amount Spent column. Entertainment
Savings
At the end of the month, total up the amount you actually received and spent for Other
each cost during the month. Subtract the Amount Spent from the Budgeted Amount VARIABLE COSTS - Subtotal
and put that in the Difference column. Take a look at where your money went. What
can you change? What would you change for next month? Income - Expenses= Current Status
Total:
