How do you create a budget?

Im a single mom and make a middle class amount of $

See my blog http:/financialiteracyforyou.bogspot.com for three articles on budgeting They are in esscence here. If you find this useful check my blog. I write a weekly column for a local newspaper on financial literacy. Articles are posted weekly.

Last week weekâ€™s topic was getting ready for the 2007 tax year. This week we are going to start talking about the real essence of financial literacy. Recall the AICPAâ€™s definition of financial literacy:

"the ability to effectively evaluate and manage oneâ€™s finances in order to make prudent decisions toward reaching life goals."

The tools you need are ones that help you plan how you are going to spend your money. First determine your life goals. Be realistic. Write down on paper your short term goals, intermediate term goals, and long term goals. Short term goals are those you can achieve reasonably within a year. Intermediate term goals are those you can reach within five years. Long term goals are those that take longer than five years.

Remember when making goals they need to be achievable within your actual resources. If you make $25,000 a year and have retirement savings of $25,000 and you are turning sixty-two in five years, it is highly unlikely that you can save enough to have an income of $13,000 a year from your savings until age 80.

A realistic goal could be purchasing your next car without financing it. Set an amount you are willing to pay for your next car ($20,000) and pay yourself that amount each month ($317.22 @ 2%) from your pay. Placing that at interest in a credit union account provides a safe place to park the car payment until you are ready to replace your current car with a new car.

Your goals need to be quantified: in five years I will buy a new car for no more than $20,000, in five years I will retire and I wish to have income of $5,000 a year from my retirement savings until age 80, or in 18 years I wish to have $25,000 a year to pay for my childâ€™s college tuition for four years. Another tool you need in goal setting is the ability to calculate the time value of money.
The next question you need to ask is do I have the resources to achieve my goals. The tool to determine this is budgeting. Budgeting coupled with setting oneâ€™s financial life goals puts you in a position to plan your financial journey.

We are going to continue talking about your basic financial plan. This will be the road map you use to reach your financial goals during your life journey. The first step was to determine realistic, achievable goals. The next question you need to ask is do I have the resources to achieve my goals. The tool to determine this is budgeting. Budgeting coupled with setting oneâ€™s financial life goals puts you in a position to plan your financial journey.

We talked about short, intermediate, and long term goals. Short term goals are those you can achieve reasonably within a year. Intermediate term goals are those you can reach within five years. Long term goals are those that take longer than five years. Write these goals down. Make sure they are quantifiable: in five years I will buy a new car for no more than $20,000, in five years I will retire and I wish to have income of $5,000 a year from my retirement savings until age 80, or in 18 years I wish to have $25,000 a year to pay for my childâ€™s college tuition for four years.

The next question you need to ask is do I have the resources to achieve my goals. The tool to determine this is budgeting. Budgeting coupled with setting oneâ€™s financial life goals puts you in a position to plan your financial journey.
The first step in preparing a budget is to determine how much money you have coming in. Write down one column listing the source of your monthly income (e.g. job) and a second for the amount. Total it for the month. A good idea would be to do this for all twelve months; so, you get a complete picture of your income, including any bonuses or special payments you receive.

After determining your monthly income, list the expenses you have to pay every month using two columns, one column identifying who you pay and one to show the amount. These are expenses like mortgage payments, rent, utilities, phone and other items you have to pay others. If you have other special required payments through the year (e.g. annual insurance payment) doing expenses for the whole year would help you plan to manage your cash to meet all your expenses through the year without borrowing. What is left is money you can choose how you spend. I would include food, clothes, and other items that you determine how much you spend. What is left after you have determined your spending requirements and subtracted your spending from your income is what you can save. That may not be very much.

We are going to continue talking about your basic financial plan. Last time, we discussed how to create a budget. After having created the budget and determined your income and spending, we used the budget as a gauge to see the amount of money you have available to meet your financial life goals. Many do not have enough money to meet their desired goals even after having planned their spending.

At this point, you have determined that you do not have sufficient resources to meet you financial life goals. What can you do?
1. Revise your financial life goals to meet your resources. Look at what the money you save can do and change your goals to meet your available cash. If I had planned on $5,000 of retirement income each year from my savings and the amount money available for me to put aside would only allow $1,500, then my revised goal would be saving to achieve the $1,500 level of income.
2. Cut spending. Look at what you do spend money on and decide if there is any way you can reduce your spending. If you can do this then you increase the money you have to meet your financial life goals.
3. Pay down debt. This course action is one many Americans need to take to achieve their financial goals. If you pay down debt you are no longer paying interest. This frees up the total mount you were using to pay debt once it is paid off. You could combine paying down debt with cutting spending to more rapidly free your money to achieve your goals.
4. Get a second job or other second source of income. If you cannot find enough money through cutting spending or paying down debt, then this is a solution. It is a very hard solution because it takes time and energy. Obviously, increasing you money resources makes it more likely that you will achieve your goals.

Simple.
1.Always pay yourself FIRST. Taken 10% (more if possible) right off the top of every paycheck and save it.
2. Pay cash for everything.
3. Spend less than you earn.

This system works no matter what your income level.

You need to take your monthly income and divide it up reasonably between essential things/services which you have to pay for each month. Things such as electricity/gas/internet will be about the same every month so you can pretty much give them a set amount deducted from the total. Then you need to deduct from the total your monthly rent/mortgage. Then work out how much it costs you to feed/clothe/look your family for a month and deduect that. Lastly you should add an allowance for extras. Then all you need to do is keep within the boundaries you have set for yourself and as long as you don't go over budget in any one section you should always keep within your monthly income. Sorry if this wasn't particularly clear. Check the link or have a search on Google for more info.

I am not a single mother, but what I do is take a spiral notebook and write a budget out for the entire year. I only get paid twice a month, so anything outside of that is extra money to go in my savings. As, it approaches payday, I doctor or add in when bills come up. This helps me to keep a running accurate total. I write down my bills and the exact amount I get paid. I put my biggest bills first and try not to go to wal-mart or anywhere until after my bills are paid. If I have any money left over after payday before the next, I either save it or I roll it over with the next check. There are some good websites you can go too as well. You can type in free budgets online and can download samples that you can follow. It is hard work budgeting, but in the end.. It is so worth it. An don't forget about yourself either. I have one luxury item a month. I may go buy a household item or get my nails done. Keeps me from feeling like all my money belongs to someone else.

If I find myself overspending, I tally up all of my monthly expenses (including all of those cappuccinos), and then ask myself where I can make some cuts. Over the years I have done stuff like: canceled cable TV, joined Skype and canceled my telephone service, lowered my cell phone rate, transferred high interest rate credit card balances to 0% credit cards (for at least a year), cut back on gourmet grocery items, opened a savings account and deposited up to 50% of my monthly income in my account (Emigrant gives you 5.05%) etc. Eliminating superfluous stuff from my life allowed me to save enough money to put down payments on 4 houses in 2 years. 5 years later, the houses are paying for themselves and have more than doubled in value! When you have a nice nest egg, you don't feel like you sacrificed much at all.

Take what you make in a month and then you need to subtract all of your bills to see what you have left over to spend on things.

1. Rent/Morgage
2. Utilities
3. Food
4. Credit Card/Loans
5. Miscellaneous Expenses

After creating that estimate and subtracting that from what you take home each month, you will know what $$$ you have left over each month to know what your budget is.

GOOD LUCK

Creating a budget is a simple but time consuming task. (I am also a single Mom on a tight budget)

You need to sit down and make a list of the things that you spend your money on starting with the necessities, make sure you leave room for clothing and entertainment, as well as transportation (gas for the car or bus fair), and savings (I like to call it the OH **** fund, LOL)

Once you have a list done you can use a simple Excel spreed-sheet to perform weekly yearly and monthly calculations.

The most important things about budgeting it that you have some room for flexibility just in-case that water bill is a few dollars higher next month (if its less GREAT put the extra in the OH **** fund), and the other important thing is that you stick to your budget.. if you budget 50 dollars for gas a week and a friend needs a ride and you've spent your 50.. you cant help unless they can give you some gas money....

Biggest part of creating a budget is to list everything you spend money on, from that daily paper to a weekly splurge.....be honest with yourself. Then you put what you spend and what you make next to each other and see what you have left...if you are lucky...lol There are lots of books at the library to help you learn how to cut corners and make your money go further.

a budget is two parts: Income / Expenses

so make an excel spreadsheet
first list all expenses, total them
then list all income, total them

now subtract the expenses from the income...you will either be in the black (positive) or red (negative)

let me know if you need assistance.

good luck :)

Get a piece of paper and write the amt of your paycheck on it. Then figure out what bills HAVE to be paid (car payment, electric, insurances, water, phone, daycare) and write the names and amounts under the paycheck amt. Make sure to save money if you can for those bigger bills or emergencies.

$600 paycheck
-$100 electric
-$25 water
-$75 cell
-$200 daycare
-$100 food
= $100 left after bills

Then take the bills that you WANT to pay. If your child wants a barbie doll, then take it out of that last $100. But make sure you stick to it or else you've gone to the trouble for nothing.

First start out with writing down how much money you earn in a month. Then start listing your regular monthly expenses that you can rely on seeing every calendar month - things like mortgage or rent, utilities, etc. Then get into the mutable expenses like food, gas, clothes etc. Take a look at your past months' receipts, figure out what you've spent on average and put that down as the amount for each of those areas.

Next, add up your expenses and subtract it from your monthly income figure. This will tell you if you need to adjust areas.

These figures become your monthly projections of what you can expect to bring in and of what you know you'll need to pay out. It helps if you can save about 10% each month as a buffer in case the unthinkable happens like the car breaks down or someone gets sick, but as a single mom...I know that's harder said than done.

However, that's the basics.

Gather all your receipts, check stubs, check book register etc for the last several months, if possible for the last year. Create a list of recurring expenses, like housing, utilities, transportation (car payments, fuel, insurance, parking, maintenance, bus passes, etc), food, any other insurance, etc. Some expenses arenâ€™t paid every month, like auto or homeownerâ€™s/renterâ€™s insurance, so you may have to go back several months to find these expenses. Any expenses that are due less frequently than every month will need to be divided to determine the monthly amount for your budget. This will need to be put in to a reserve account so that those expenses can be paid when they come due. For example, if you have auto insurance that is $300 every six months, you need to budget and put aside $50 each month so that you can pay the insurance bill when it is due. Some insurance companies offer you the convenience of monthly billing, but it comes at a price. You can save their surcharges by putting the money aside and paying in full when it is due. By tracking all of your expenses for several months, you can determine where you are spending your money and where you can cut expenses to save.

Next, calculate what you will need for clothing, makeup and other incidentals and budget a monthly amount for these. If you donâ€™t spend it in that month, put it in your reserve account to carry over for future months. Using some sort of spreadsheet may help you to track your reserve account. Be sure and budget for school supply expenses, if they apply.

You also need to budget for a â€œrainy dayâ€ fund, with a goal to have six monthâ€™s worth of income set aside. This will take time to accomplish, but you have to budget for it. Start with a percentage of your income that is comfortable at first, increase it gradually. If you put it away immediately you will have better success.

Be realistic with your budget and it can work. A budget is really nothing more that a cash flow analysis! Money comes in, money goes out. You control where it goes out.

When you spend money , make sure your not just spending it on things you dont have to have. Every payday set aside money to do special things with the kids as a special family thing. The rest , make sure bills get paid first . Make meal plans. For example , sit down and make a chart of what your going to fix for dinner,and supper. Do sandwiches, and a decent supper. Make pop, ice cream etc. a treat once or twice a week. Cut back on all sugar products, things your letting your kids have extra. This will help you to save money on the side a little and eventually you will have a little cash when needed. I hope I helped you, or maybe helped you think of other ways.

Making a budget is easier than sticking to it. Before buying something, ask yourself if you can live without it. The answer will help guide you.

Control how much you spend. For an example, instead of buying name brand buy store brand, or cut coupons.

Here is the template I use to see what I'm spending each month:

Total income: $
Living Expenses

Mortgage.........
Car Insurance....
Light bill..........
Gas billâ€¦.......
Phone.............
Gas for car.....
Groceries.......
Meals out........
Entertainment....
Savings..........
Misc................

Total Living Expenses: $ (add everything from above)
Loans: (includes credit card, car note, student loans, etc.)

Discover $5/ month $50 balance (pd. in 5 mo.)
Citibank $5/ month $50 balance (pd. in 1 mo.)
Mazda $5/ month $50 balance (pd. in 10 mo.)

Total Monthly Loan Payments: $15
Total Income $ - Total Expenses $ = $

Of course, you have to tailor it to your situation because you may pay all your utilities on one bill or you may not have credit card debt, but it helps me to see where my money is going and where I can improve. Also, if you have credit card debt, you can put a time limit on when you want it paid off and pay it accordingly so that you meet your goal.

I really hope this is helpful to you and I wish you luck!

I've created a spreadsheet where I list all of my expenses & when they're due on the left and my pay periods across the top. Then I start with entering my minimum payment amounts under the corresponding pay date for each month. I then total the payments for each pay date, enter my estimated paycheck amount, then subtract the bills from my paycheck. That way I can see how much I'll have leftover & make sure I have enough for gas, groceries, etc., and I can plan for periodic expenses like car registration, insurance renewals, etc. I can also plan for extra spending on birthdays, holidays and vacations. I've tried other methods before, but this is the only one that's worked for me, especially since it's so easy to update any time I need to shuffle my bills around a bit!

I'd be happy to email it to you - you can send me an email from my profile page and I'll send you a blank version (if you let me know your pay schedule - bi-weekly, 15th & 30th, every Friday, etc. - I'll set it up for you).

make sure theres food in the house.take lunch to work.buy sacks for the kids in bulk.make sure you pay you bills with your second pay check.

Create a spreadsheet on Excel.

Show your income per pay in the top columns (columns should be per pay)

The rows should be filled in with your necessities first -- anything you pay out on a recurring basis to survive.

rent/mortgage
food
electric
gas (if necessary - for home)
car payment
water
cable
daycare
etc.
credit card payments - list each card and payment

Total up your column and subtract it from the wage amount at the top of the page.

If you wind up with a negative number you either need to find another source of income or cut down where ever possible.

I don't always stick to my budget, but its helpful so I don't forget a bill that was due.

If you'd like a sample, email me.

Good luck.

You have to look at things practically. You have to decipher your needs versus your wants. Always put your needs first which is things you must have. I'm a single parent myself and I've learned that if you don't create one you will always end up with stuff you don't need. I write a list of everything that I must pay on a monthly basis. When I receive my check in my account I get my balance and start going down the list of things I must pay. In the end whatever I have left over that will be for the things I would like to buy for me or my son.

creating a buget is fantastic planning is essential- sticking to it is the hard part.
you really need to think about the difference between needs and wants. to help with this theres an excercise you should really do- David Bachs Latte Factor! it blew my mind- for a week write down every penny you spend- everything from a pack of gum to the rent or mortgage. write what you bought- how much it cost and whether you really needed to make that purchase.
at the end of the week tally up how much you spend on stupid stuff like the 4$ latte or the 6$ on chinese for lunch- you'll be amazed by how much money just slipps though your hands!
i did this several years ago when i was making only 25,000 a year. i would never have thought that i was spending over 100 bucks a week on frivolous crap stuff i didn't really need and couldn't really remember that i had bought- but i was. so then i started another experiment- everytime i was about to buy anything i asked myself why- was i bored? feeling deprived? feeling poor? i realized i was an emotional spender. everytime i realized i was buying something i knew i didn't really really need or that i buying something to make myself feel better, i didn't buy it and instead transfered that money from my checking to my savings- i could not believe it! id didn't fee deprived- i wasn't being miserly- i was just more thought ful on what i was spending and why.
i didnt look at the money i transfered - $3 here, 11$ there- I just acted as though it were spent. Within 3 months- on a 25,000 salary- i saved over 1000 dollars!
once i learned how to get my spending under contorol and really saw how much i was pittering away, a budget really made sense and once i made it i stuck to it. i had an idea how much money i really needed for things, and i knew how to save...
i highly suggest buying books by david bach (smart women finish rich) or by suze orman (women and money)- they're my favorite authors on money matters.
you'll be suprised by how much money you have!
good luck and my best to you and your family!

First you have to figure your monthly income
next write down your monthly bills and amount due
write what you spend on food and gas
add up the amount and deduct it from your monthly total income the remainder would be what you have as extra for spending or savings. If you are paid weekly you now need to divide the montly expenses by 4 to see what needs to be put away for payments. you could also set up envelopes with the amount due for the end of the month for each individual expense and weekly place the money in the envelope hope this helps you out.

Pay yourself first. Live within your means.
Avoid consumer credit.
The key to a good budget is to pay attention to where every cent goes and making adjustments where you can.

I try not to eat out as often. Look for deals and sales. And I also try to keep at least $100 dollars in the bank and increase the amount each time I get paid. For example, the first time I get paid I keep $100 left over, then the next time $150, etc. That way the amount keeps rising over time! Also, do not use your debit card or checks!

Check out http://www.expenseregister.com . This is free tool to create a budget and track expenses. You can upload your bank and credit card statements. They also have nice reports and charts. You can create a budget and they have a nice tool for that, it suggests all the categories, then you enter your expenses and you can check your budgeted and actual expenses... so you know how much you have left in each budgeted category.
They also have a category in the budget called 'Savings'... it is elementary that you should save, but when there is someone to guide you through this budgeting process, it makes it a whole lot easier.
I have been using it for some time now and I am very pleased with it. And it is totally free!

Rent is $$$, Food is $$$, utiltities is $$, car payments or transportation is $$. Your paid twice a month. One pays for the rent, don't touch that cash, its reserved for it. Get it?

Best to have a checking account. So you don't fool yourself with so much cash you have. Balance you c/b each month.

I use the budget template in Works, it works quite well and keeps things in your face so you can see where you overspend and what-not.

It's a simple process, really.

1) Take a sheet of typing paper, and draw two lines horizontally through the middle, dividing it into thirds.

2) Above the top line, write down all the money you make in a month.

3) In the middle section, write down everything you spend on stuff you NEED (rent, mortgage, insurance, food, etc.).

4) In the bottom section, write down stuff you WANT to spend money on (vacations, restaurant meals, money for savings accounts, etc.

5) Add up what you're making and what you're spending.

Example:

Income: $3000
-----------------------
Rent $800
Cable $125
Car Insurance $60
Electric $100
Phone $30
Cell Phone $40
Water $15
Food $300
Gasoline $120
------------------------
Savings $400
IRA contribution $400
Cash from the ATM $400
Entertainment $230

Total income: $3000
Total Spent: $3000

Because the total income and the total spent match, this is a "balanced budget"

If you have more spending than income, you must do one of three things:
1) Earn more money (a second job...)
2) Spend less
3) Take out a loan (the government loves to do this for their budget)

This may sound harsh, but if you want to get ahead in life, it's worth getting by without the luxuaries until you are better off. I won't go into how to first pay all the essentials, everybody has already covered that. You have to think about what's important to you: what entertainment can I have that's affordable (eg. can I afford cable TV or get by with public TV for now). The idea is to not completely deprive yourself, otherwise you overspend when you feel too cheated, but to spoil yourself with little things you can afford. Being a single mom is really tough. I was one for 7 years. I wish you luck. People often accuse me of being stingy, but it has paid off, because now that I'm older, I don't have to worry too much about finances.

I keep mine on an Excel spreadsheet. Rows, going down, are Date, Balance Forward, Paycheck, Child Support, Cash, etc. Subtotal on the next line (Bal Fwd + Income). Then start listing expenses; don't forget gas, groceries, prescriptions, allowance, with your regular bills. The bottom of each column is the total of your Subtotal (income) less all the expense lines. The next column's Balance Forward is a copy of the previous column's total. Your first three columns are for descriptions: name, due date and amount; then sequentially across the page top each column with the date of each payday. Format it correctly and the spreadsheet will do all the math for you. You can plan out your expenses, easily seeing what dates have extra money or where you'll be short in three weeks if you splurge today.

totall all your income for the month, track ALL your expenses for the month by saving receipts for everything and catagorize all expenses. find out if your in deficit spending or not and decide which catagory you need to reduce if needed

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