Help Desk FAQ

Budgets/Money management


How do I create a budget?

A budget is a spending plan to help you forecast and control your expenses. To create a budget you need to know how much you spend each month and compare that figure to your income to ensure that you are not spending more than you have coming in.

First, pay for necessities—rent or mortgage, food, utilities, insurance, transportation, credit payments, etc. Second, contribute to savings for important goals, including an emergency fund that covers three to six months of living expenses. Only then should you spend on such non-essentials as dining out and recreational shopping.

To help allocate your income according to your priorities, create a monthly budget. Include all your expenses: fixed and variable, essential (needs) and discretionary (wants). Break down annual and occasional expenses (car registration, insurance premiums and holiday gifts, for example) into monthly amounts. Include savings as a fixed monthly expense. And don’t forget to include money you “fritter” away on things like coffee, snacks and magazines. (For a real eye-opener, track your daily spending for a month.) 

If your income doesn’t cover all your wants and needs, make cuts in spending, increase income or do a combination of both.

Read this related FAQ to find free online budget templates.




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