Learning To Budget Your Money By Example
Learning to budget your money by example is designed as a "lab" exercise to help people learn how to budget their money by example using a budget calendar type system. After a brief introduction and description of the system, we will give you the opportunity to put the your new budgeting skills to the test by using our unique lab exercises to demonstrate how the system helps you with your personal budget.
The system is really very simple, and we want to keep it that way. All you really need is a pencil, calculator and a calendar. We've got you covered there with our customized BudgetByExample.com Personal Budget Calendars available for printing.
The real secret to a sound personal financial budget is to know how much money you are bringing home, and where the money goes. To do this, all you really have to do is write down all your bills and when those bills are due. Of course the hard, and most important thing is to allocate enough money from your paycheck to pay those bills! If your bills and other expenses total more than your take home pay, then of course you have a real problem. Unless you can completely eliminate certain bills or expenses to reduce your monthly expenditures, such as cutting back on eating out, going to the movies, etc, then our only advice is that you need to increase your take home pay, a second job for example.
When you are building your list of bills and expenses, it's best to start with those bills that are "fixed" amounts each month, rent/mortgage, car payment, cable bill, etc. Once you have listed those bills, move on to the expenses that change from month to month, food, entertainment and the like. Starting with the "fixed" monthly bills will make it easier to get things going. Listing what you spend on each month for food, movies, pizza, gas, the expenses that are not fixed amounts may be a little more difficult, so we'll leave those items for last so that whole process easier and not so stressful at the start. It's ok to approximate the expenses that are not fixed, we'll call them "Variable Expenses" in the example below.
Once you have listed out all your bills and expenses, it's time to transfer all the information over to a BudgetByExample.com Personal Budget Calendars. This will allow you to see your bills each and every month, how much is due and when. It's very important to have this visual representation of your personal budget, the repetition of putting your bills on a calendar each month helps you understand where your money goes each month, how much you need to have available and when, and hopefully how much you have left over.
Let's get started!
For the purpose of our example budget, we are using a take home pay amount of $4060 a month. In this example the total monthly bills and expenses comes to $3154, so this budget has a surplus of $906 a month.
Step One - Listing your bills and expenses(fixed items first)
Best to try and order them by when they are due:
|Credit Card #1
|Credit Card #2
Step Two - Completing your BudgetByExample.com Personal Budget Calendar
To illustrate this process, we will use a series of graphic images, where we have taken the information from our detailed list of bills from Step 1 above, and transfered that information onto the actual calendar. You should do this every month, not only to remind you what is due when and how much, but in the event something changes, you'll "see it" on the calendar. This is all part of "knowing" where your money goes each month.
In this image we have taken each of the bills listed above and written them in the "white space" of the calendar where there are no actual days. This simply allows you to see each of those bills and expenses as a list again each and every month.
In the series of images that follow, you see where we have taken each individual bill or expense and wrote them on the actual day of the month the bill is due. In the case of "variable expenses", food, gas, entertainment and take-out, we broke those down into four equal amounts listed on the Saturday of each week.
Full Size Calendar View
(CLICK TO ENLARGE)
Step Three - Lab Exercise
Now it's time for you to try this for yourself. Build a list of bills and expenses as demonstrated in Step One above. Then print out blank copies of the BudgetByExample.com Personal Budget Calendars, and start transferring your bills and expenses over to the calendar.
It's really that simple!