What does a budget look like?

A budget is a written plan of how you intend to spend your money over a period of time. Usually, people set up a MONTHLY budget.

It doesn’t have to look fancy. It can be a No-Frills simple budget. The key is to take ALL of your income and allocate it into SOMETHING until there is nothing left to allocate.

For example, Let’s say you make $3000 a month. You know you’ll need gas, food, electric, phone, etc. So write out a list to take care of those things first. It might look something like this:

Monthly Budget (June 2010)	Income	Expense	Balance
Income	$3,000.00		$3,000.00
Tithe		$300.00	$2,700.00
Electric		$200.00	$2,500.00
Water		$65.00	$2,435.00
Food		$300.00	$2,135.00
Gas		$100.00	$2,035.00
Mortgage		$1,500.00	$535.00
Credit Card		$100.00	$435.00
Dr. Visits		$80.00	$355.00
Cell Phone		$125.00	$230.00
Home Owners Association		$125.00	$105.00
Netflix		$15.00	$90.00
Entertainment		$50.00	$40.00
Clothes		$40.00	$ –

The big thing to remember here is that the balance at the end of the budget should be ZERO. This means that you have a plan for all the money you have coming in.

What if I have an expense that’s not on the budget?

The only thing you CAN do in a situation like that is take money OUT of one of the other categories. So if you had a car repair for $100 (Something you HAVEN’T budgeted for), then you may have to lower the budget for entertainment or food (or both).

Next month, any expense categories that you didn’t anticipate SHOULD be put into next months budget so that you can plan for those expenses in the future.

Now is a good time to set aside some money for a vacation, or a car repair fund, or an emergency fund.

If you’ve allocated money to every thing you can think of, and you still haven’t reached ZERO at the end of the budget, you can use the catch all category: SAVINGS.

Have you had any trouble keeping a budget?