How do I make a budget?

[ErikaLeigh]

I need some help learning to budget.

I'm now in control of the money, and it's going to be all my choices from here out.

So I need to learn how to make a budget and actually stick.

I had kinda been budgeting the whole time, but now I can actually keep up with it!

Anyone wanna help me?

[grlpowers]

First you need to write down all your fixed expenses, like mortgage, car payments, insurance,eletric, gas, groceries, stuff like that. Then add all them up and see what you have left. Use your leftover money for savings, entertainment, gifts, and other flexible expenses. This is if you don't need to cut back on your spending. If you need to set budgets for all spending like groceries and entertainment then write down all your fixed expenses and then divide any money that is left and see what you can cut out to fit in everything you have to pay. Please try to save a little each month even if you have to pay off some king of debt. Even if you can only put $10 into savings a month it is better than nothing. Good luck at conquering your budget. Once it is in place you can always play with it from month to month to meet your needs.

[maisiedotes]

My parents started writing down every single cent they spend each day- on tolls, newspaper, groceries, etc. They were amazed at how much it all adds up. Just wanted to throw that in to the mix while you are planning your budget...

[KariM]

These are the categories we use:

Mortgage (includes home owners insurance, taxes)
Home Maintenance
Car Payment
Auto Insurance
Auto Maintenance
Auto Registration
Gasoline
Electricity
Natural Gas
Water Utility
Home Phone
Cell Phones
Student Loans
Groceries
Clothing
Misc. Sundries
Entertainment
Homeschooling Supplies & Books
Bus Fare
Savings
Pet Expenses

(health insurance, dental, vision, some life insurance, retirement, etc. is all taken out of DH's paycheck along with a flexpay account which covers any out-of-pocket medical expenses)
We started by charting out all of our fixed expenses like mortgage, car payment, student loans, utilities, etc. Any bills we paid other companies/people on a recurring basis.

Then we looked at what else we need to purchase or use our income for - all the other categories basically.

[songbird45]

I've done this.

Step 1. Find out what you're spending money on each month. Don't leave ANYTHING out. Not even one thing. This is a VITAL, CRUCIAL, SUPER IMPORTANT step. I am not kidding. If you don't do this, you are setting yourself up for failure. If you want, you can set goals for various categories and then do your tracking, but think of the first 2-3 months as experimentation. Use old credit card bills or bank statements as your guide for an initial budget if you have them.

Step 2. Back to step 1. Are you disciplining yourself to write down everything that you spend money on? How will you know that you stuck to your budget if you are not in the habit of writing it all down? Get in the habit. Watch your current spending habits for a few months. Your current spending habits IS your initial budget.

Step 3. Where do you want to make changes? What are you spending too much money on? What do you want more money for? When you see where your money is going you can make intelligent decisions about this. If you say, "$40/month for entertainment" and right now you're already spending $200/month on entertainment you won't know how to stay in budget. If you know, you might say, "I've been eating out every weekend. If I have a potluck with my friends every weekend instead I'd save $100" and you will be successful. Or, "I'm spending $300/month on food and I think that's a lot, but it's really important to me to eat well so I'll have to cut back in other places." You can only make these decisions if you know where your money is currently going.

[ErikaLeigh]

First off, thank you SO much for replying.

The main things I'm going to have (and will be split between me and SO soon)
will be


Rent ($500)
Water Bill (Around $10-$20)
Power ( I have NO clue how much)
Gas (for car, apt is full electric)
And then food


What do you do with things like water and power that can vary?
ETA: and the groceries!

[BetsyS]

Originally Posted by ErikaLeigh

What do you do with things like water and power that can vary?

What works for us is to budget on the high end of what the bill might be. For instance, we budget $200 for electricity and natural gas. About 9 months of the year, that is the right amount (high elec in the summer for AC; high gas in the winter for heat). However, in the spring and fall, it's frequently cheaper.

In those months, I then take whatever is left over after paying those bills, and it's "found" money. Maybe it goes over into the Christmas envelope or the entertainment or eating out or whatever. But, it's a treat. It also inspires us to cut down those bills.

[KariM]

Originally Posted by ErikaLeigh

What do you do with things like water and power that can vary?
ETA: and the groceries!

What we do is use budget billing with our utilities. The availability can vary and most utility companies require that you have a certain period of time as a history in order to set it up. But that way we have a fixed bill every month for electricity and natural gas. If you use more than the budgeted amount you receive a bill at the end of the cycle that is higher and if you use less than the budgeted amount you receive a credit.

We tend to run credits rather than having large bills at the end - I guess we're more frugal with our utilities than the average customer.

For groceries I went back six months or so and added up the costs and divided to get a monthly total. Then I went ahead and came up with a monthly budget.

[ErikaLeigh]

thanks so much!

[moon child]

lots of great replies! :

[ErikaLeigh]

[yeahwhat]

Originally Posted by ErikaLeigh

Rent ($500)
Water Bill (Around $10-$20)
Power ( I have NO clue how much)
Gas (for car, apt is full electric)
And then food

Don't forget things like insurance (renters and car), clothing, things for the house, maintenance for the car and registration, entertainment, phone, cable, internet. If you go through several months of bank statements, you'll get an idea of where your money has been going.