Lesson 1: Creating a Budget

The purpose of creating a budget is to ensure that money spent each month does not exceed the total monthly income acquired each month.  The earnings after tax, plus any supplemental income you may receive make up your total monthly income.

Budgeting is easiest when done monthly, since debts and bills are usually paid once a month.  The following guidelines make creating a monthly quite simple:

  • The first step is finding a good monthly budget form to use and update monthly.  This form is the breakdown of you total monthly income, and your debts and bills.  See Online Budget Form for example form template and instructions.
  • Next you will need to calculate your total monthly income.  Follow these instructions to learn how.  An Online Calculator may be needed to ensure your math is correct.
  • Gather up all of your expenses, bills and/or debts to list as the line items for your budget. Once you add all of these costs up, and subtract them from your total monthly income, you can determine if you have any underage/overage and whether you need to cut back on spending.
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