Rss Feed
Tweeter button
Facebook button
Reddit button
Delicious button
Digg button
Stumbleupon button

Want to Save Money? First Create a Budget.

{ Posted on Mar 28 2010 by Marcus Alston }

One of the first things that you must do in order to save money and spend less is identify exactly where your money is going, how much you are bringing in, and how much positive cash flow you have, if any. 

After you have identified this essential information, then you can better understand your situation and analyze where you can possibly spend less and save more.

Below is a list of key elements of a detailed personal budget.  If you are already balancing your budget, filling out the categories below should be relatively easy.  If you have not been paying much attention to your budget, then it will take a little more work.  In order to recreate your financial picture which will be the basis of your budget, you should start tracking your spending for a month, or even better, you could look through your bills and spending records for the information you will need.  By recreating your financial picture, you will prove to yourself that you can put your hands on important financial information when you need it which is essential to keeping your financial house in order.  Gather your past credit card bills, mortgage statements and other bills.  If you use an on-line bill pay service, use it to help figure what bills you are paying and how much.  Pull out your old pay stub or go online and locate a copy.  Your spouse, partner or significant other should do the same. 

Budget Content. You should read through the budget content below completely before using it so that you see all the categories and can place the information in the appropriate section.  Calculate amounts on an average monthly basis:  I suggest putting this in a spreadsheet such as Excel so that you can track actual expenses each month versus your budgeted expenses.  If you do not have a spreadsheet, you can use old fashioned paper and pencil

1.  INCOME: All gross income, child support or alimony, social security income, disability income, pension income, investment income, real estate investment income, other income.  Make sure you put this into a monthly number.

2.  EXPENSES (NECESSARY AND DISCRETIONARY):

Necessary Expenses

  • Housing: Mortgage or rent, condo/association fees if applicable, property taxes if applicable.
  • Utilities: Gas, electric, water/sewer, heat, trash, recycling.
  • Insurance: Insurance for homeowner’s/renter’s, car, health, dental, disability, life, long term care, other.
  • Children: Childcare/babysitter/daycare, camp.
  • Clothing (Necessary): Work clothes, casual clothes, underwear & socks, pajamas.
  • Credit Cards: Credit card monthly payments.
  • Credit Card Interest:
  • Food (Necessary): Groceries, vitamins, other.
  • Loans: School, personal loans, home equity (excludes auto loans).
  • Medical: Dental bills, prescriptions, over the counter medicine, glasses or contact lenses, eye exams, insurance co-pays, medical bill paid/unreimbursed expenses, other.  Excludes elective surgeries which costs go into the discretionary category.
  • Tuition (don’t double count with applicable student loans):
  • Alimony:
  • Child Support:
  • Savings: 401K, IRA, college fund, mutual fund, money market account, other.
  • Taxes: Federal, state, local, other.

Discretionary Expenses:

  • Housing: Renovations, repairs, furniture, decorating, appliances, bedding, cleaning service, exterminator, lawn service, pool service, snow removal, rug cleaning.
  • Utilities: Telephone, phone, cable/satellite dish, Internet, security system, other.
  • Alcohol:
  • Cigarettes and tobacco:
  • Food: Restaurant, coffee, snacks, other.
  • Automobile: Car loan, car lease, gas, repairs, maintenance, car wash.
  • Transportation: Parking, tolls, bus, train, taxi, plane, maintenance.
  • Clothing (Above what is necessary): Work clothes, casual clothes, sports clothes, shoes, jewelry, watches, accessories, underwear and socks, pajamas, dry cleaning, tailoring.
  • Children: Toys/games, birthday parties, allowances, diapers, formula, childcare/babysitter/daycare, camp, lessons (tutoring, dance, music, tennis, soccer, swim, etc.), equipment for activities, computer, video games, class trips, other.
  • Pets: Food, grooming, veterinarian, toys/supplies, boarding, walking service, vitamins, dental, medical.
  • Entertainment: Movies, concerts, plays, sporting events, videos/DVDs, music CDs, downloads, books, magazine and news paper subscriptions, and computer software.
  • Medical (Above what is necessary): Includes elective surgeries.
  • Travel: Vacations, plane, train tickets, gym memberships, club memberships, hobbies, gambling/lottery.
  • Personal Care: Barber/hair stylist, hair care products, personal care products, manicure/pedicure, cosmetics, massage/spa.
  • Professional fees: Lawyer, tax prep, financial planner/accountant, personal advisor/coach, bank fees, credit card fees, brokerage commissions.
  • Gift Time: Birthdays, wedding, anniversaries, showers, holidays, decorations, greeting cards, wrapping paper.
  • Church: Tithing, collection contributions.
  • Charities:
  • Unexpected Expenses:
  • Other:

Once you fill out the above information you will know your income and your expenses.  Subtract your expenses from your income.  If your income exceeds your expenses, congratulations, you have positive cash flow and you can save at least a portion of this money and are in a good position to reduce debt (if any) and build wealth.  If your expenses exceed your income, you need to cut your expenses.  Don’t know how to cut expenses?  I will cover several methods in future blog posts.

Be Sociable, Share!
Copyright © 2010 by ConsumerMiser.com. All rights reserved.


47 Responses to “Want to Save Money? First Create a Budget.”

  1. This is cool!

  2. Los,

    I am glad you enjoyed this post on budgeting. Please share with your friends and look for other helpful articles.

    ConsumerMiser.com

  3. Wow,great content and your blog design is just gorgeous. Is this template free or not. If so, would you please share this template? if not, Where can i purchase it? Thanks a bunch!

  4. Vibram Five Fingers,

    Thanks for the interest and question. I use WordPress and the theme is Excellence by Jai Nischal Verma. It is free. The note on the theme states:

    “Excellence by Jai Nischal Verma
    Excellence was designed and built by Jai Nischal Verma I love to hear of my work being used :). This work is licensed under a Creative Commons Attribution 3.0 License. This means you may use it for any purpose, and make any changes you like. Just leave my link under your footer.
    All of this theme’s files are located in /themes/excellence.”

    You can find the theme template at: http://wordpress-themes.free-css.com/free-wordpress-themes/page32/excellence

    Also, my brother, Carlos Alston, helped me modify and customize the template. Click here for more info on him.

    –ConsumerMiser.com

  1. 43 Trackback(s)

  2. My Top 9 Favorite Extreme Saving Methods | ConsumerMiser.com
  3. 5 Steps to Controlling Your Debt Now | ConsumerMiser.com
  4. Managing Credit Card Debt – Part 1 of 2 | ConsumerMiser.com
  5. Is Allen Iverson Really Broke? | ConsumerMiser.com
  6. Car Leasing Versus Car Buying | ConsumerMiser.com
  7. The Benefits of Carpooling | ConsumerMiser.com
  8. How Many Blog Posts Should I Write? | ConsumerMiser.com
  9. Tax Time. Should You Aim for a Refund? | ConsumerMiser.com
  10. 4 Tips if You Owe Money to the IRS | ConsumerMiser.com
  11. What We Can Learn from Pamela Anderson and Other Celebrities in Financial Trouble – Part 2 of 2 | ConsumerMiser.com
  12. 5 Steps to Becoming a Millionaire | ConsumerMiser.com
  13. Miss USA 2010 – Her Financial Payoff, My Financial Advice | ConsumerMiser.com
  14. Sarah Ferguson: Royally Overspending and in Debt | ConsumerMiser.com
  15. Ex-Student $275,000 in College Debt | ConsumerMiser.com
  16. Graduating from High School – My Financial Advice | ConsumerMiser.com
  17. Next Broke Athlete: Shaq? | ConsumerMiser.com
  18. Is Verizon Wireless Overcharging You? | ConsumerMiser.com
  19. 5 Tips for Reducing Fees with Verizon Wireless | ConsumerMiser.com
  20. The Cost of Stamps is Going Up . . . Again! | ConsumerMiser.com
  21. LeBron James’ Big Financial Impact | ConsumerMiser.com
  22. 6 Things I Learned From My Trip to Vegas | ConsumerMiser.com
  23. A $35 Computer? This is no Joke. | ConsumerMiser.com
  24. Economists: Economy Recovering Slower than Expected | ConsumerMiser.com
  25. Stop Smoking and Save Over $100K | ConsumerMiser.com
  26. Dollar Stores Can Disappoint | ConsumerMiser.com
  27. Dollar Stores Can Disappoint – Part 2 of 2 | ConsumerMiser.com
  28. Is JetBlue’s All-You-Can-Jet a Great Deal? Not Really | ConsumerMiser.com
  29. 9 Reasons Not to Buy a Vacation Home | ConsumerMiser.com
  30. 8 Reasons to Buy A Vacation Home Now | ConsumerMiser.com
  31. 4 Simple Methods to Save Up to $1000 a Year on Coffee | ConsumerMiser.com
  32. What does it take to be Wealthy? | ConsumerMiser.com
  33. 16 Money Saving Tips for College Students | ConsumerMiser.com
  34. Should You Buy a Swimming Pool? | ConsumerMiser.com
  35. Getting the Most Out of Lotion, Toothpaste and Other Items | ConsumerMiser.com
  36. 3 Financial Success Stories in Sports | ConsumerMiser.com
  37. 10 Tips on How to Find A Job After You Retire | ConsumerMiser.com
  38. Unemployed or Underemployed? You May Now Qualify for Food Stamps | ConsumerMiser.com
  39. 15 Ways to Avoid Impulse Buying – Part 2 | ConsumerMiser.com
  40. Boston Market Has Changed Their December Coupons Online | ConsumerMiser.com
  41. 9 Tips for Shopping Online | ConsumerMiser.com
  42. Buying the Perfect Christmas Tree For Less | ConsumerMiser.com
  43. 6 Wishes for You This Christmas | ConsumerMiser.com
  44. Andrew Luck Turns Down Millions – A Wise Financial Move? | ConsumerMiser.com

Post a Comment