Tips for How to Create a Budget

Tips for How to Create a Budget

Sep 10, 2014

CCCS, How To Create a Budget, Financial Tips for Families

Creating a budget seems like it would be an easy task, but many people find that they cannot get started. There are many reasons for this. If you or someone you know wants to start creating a budget, here are some tips to get you started:


First, do not get caught up in the thinking trap that you need the latest and greatest gadgets to help you create a budget. Items such as a smart phone, an online budget creation program, a budget software program, a cool or cute budget form, or any other item. If you use one of these features, great, and if not use what works best for you. A simple notebook works well for many people!


Second, you will need to track your expenses, if you do not know how much you’re spending already. You can track expenses by collecting receipts or writing down every time you spend money, even if it is to pay a bill.  

Track your expenses for a month and organize those expenses into several different – but clear – categories, such as:

  • Savings
  • Housing
  • Transportation
  • Charitable Giving
  • Monthly Bills (Think utilities, cell phone plan, gym membership, online subscriptions to Amazon, Apple/iTunes, other subscriptions, etc.)
  • Groceries
  • Eating Out
  • Entertainment
  • Kids
  • Debts
  • Pets
  • Prescriptions  

And many others. Having data is important to budgeting. Guessing how much you spend each month is a start, but tracking expenses will help you be more realistic about the little things not paid monthly that could be eating up your extra income.


Finally, once you have an idea of where your money is going, you will see how much discretionary income is left at the end of the month. You can find this amount by subtracting your monthly expenses from your monthly income.  

Here’s an example:  

$3,500 (take-home pay) - $3,000 (monthly expenses) = $500.

At the end of the month, did you have that $500? If not, you didn’t track all of your expenses, so you need to track for another month and stay on track. If there is a surplus and you have extra money, GREAT!  You can choose to save more, pay down debt, share it, or spend it.  If you have a shortage, then you need to figure out where to make changes in your budget.  And remember, budgeting can be done month to month. The key to budgeting is managing it once it’s created.  

Still need help? FamilyMeans has certified financial professionals on staff to help individuals and families create and manage their budgets so they can live debt free. Contact our Debt Management program today to get started.