The more you make, the less you seem to keep. Do you have this problem, too? Why is money so hard to hold onto? It certainly requires being organized, planning ahead, and having a good budget in place. But do you know how to make a monthly budget that works?

 

Learn to make a monthly budget that works!

Many of us make an attempt at a budget, but then unexpected things creep up or holidays and birthdays happen, and our good intentions go out the window. There’s always something that is getting our attention and wanting us to buy it, take it home, and live with us. We live in a world surrounded by commercials, and it is no surprise that we are also a world struggling with personal finances.

But baby steps. Yes, it takes willpower to be strict with a budget, but creating a budget in the first place is a vital step. When you create a budget for the first time (or even if it has been a while since you revisited your budget), it really opens your eyes to where your money has been going and motivates you to perhaps make a few changes or course corrections here and there. So let’s dive in and take the first step on a journey to financial awareness with setting up a budget.

How to Make a Budget for One Month

I like to start on a scale that is easier to maintain, so I like to think of my budget as a monthly bucket. I fill it up with income and pour out expenses. And see what I’m left with at the end of the month.

What is the first step in making a budget? Look at your Income Sources

The income section is a vital piece in the budgeting equation, as it is important to know the amount of money we are working with each month. Reviewing all our income streams is a happy step, too, since this is where we collect the rewards of our hard work.

As a full-time employee, I have a bi-weekly paycheck. This step is easy because I know exactly how much I bring home after all the tax deductions as well as health insurance deductions simply by looking at my paycheck stub.  Note: just going by hourly wages is not going to give us the exact amount unless your work isn’t withholding anything for your taxes or insurance. If you have a regular paycheck that is the same each pay period, include one month’s worth of paychecks for yourself, your spouse, and anyone else contributing to the household.

This step gets a bit more complicated for those of us self-employed, freelancing, etc. I would consider my blogging income in this category, and this is why I track all blogging income and expenses so carefully. Consider whether you have a steady income or if it varies – chances are it may vary quite a bit if you are not working regular hours or are working on a project basis for clients or brands. In this case, it is a good idea to review income over at least 90 days or longer and calculate an average monthly self-employment salary for yourself. If you want to be extra conservative in your budget planning, you may wish to go with the lowest salary month as your estimated salary.

Consider any income sources:

• Paychecks from your salary or hourly job(s)
• Earnings from client work
• Blogging and Social Media income
• Freelance writing income
• Survey payouts
• Refund apps
• Babysitting cash
• Stocks sold

Those are some examples, did I miss anything? Consider those items that occur regularly and have a steady payout to calculate your baseline income.

 

Making a Personal Budget, next step – look at Recurring Expenses

The expenses part is less fun to calculate, and I find this aspect of creating a monthly budget challenging. This is where we take a look at where our money goes each month, and get a little sad at how much we actually spend. Just me, then?

I like to start this section with the most obvious culprits – the regular monthly expenses that don’t change:

• Rent or Mortgage
• Student Loan(s)
• Car loan(s)
• Child Care
• Other Debt payment

 

Then I look at the “bills” that we get each month. Sometimes these may vary depending on the season:

• Heating
• Electric
• Cable/Internet/home phone
• Wireless/mobile phone
• Water
• Trash

 

Then we move on to things that aren’t exactly bills, but are monthly expenditures as well:

• Gas/Diesel fuel for your vehicles
• Tolls
• Lawn care
• Groceries

 

This section is not as easy to predict, and I would suggest maybe looking at the last 90 days of receipts, credit card statements, etc. What are your typical expenditures in these categories?

Making a budget includes reviewing your Other Expenses

While you’re looking at your credit card statements, what else are you spending money on? Clothing? Gifts? Eating out? Auto care? Let’s put those in a variable list. These are also very important when creating a monthly budget.

Expenses that may not be monthly, but still need to be evaluated when creating a monthly budget:

• Insurance (auto, home, flood)
• Auto maintenance (oil changes, new tires, etc.)
• Household maintenance
• Seasonal clothing purchases
• Gifts
• Medical insurance (if not deducted from pay) and life insurance
• Medical expenses (doctor’s copays, prescriptions, pet care)
• Entertainment/dining out
• Property taxes

This section is where you will need to dig deep, maybe into your memory but preferably your receipts. I have the hardest time in this section, and I’m sure I’m not the only one. I am always forgetting some expense or underestimating how much something will actually cost, and get hit with surprises.

To get an initial budget in place, brainstorming the most common seasonal expenses is a great place to start and build from there. It is important to revisit this section often as new expenses come up or you remember something that was left out.

 

How to Make a Budget Worksheet – your summary of Income and Expenses

When you’re done figuring out your monthly income and subtracting out your average expenses, you can then see what is remaining and going into savings. For me, this is where the trouble comes in. Often I realize there isn’t much going into savings, or I even see a negative amount! That’s where we start tweaking the expenses line items and see where we can reduce or cut out spending. This is the part where you create a monthly budget that you can stick to.

While painful, going through and realizing what you are actually spending on is very eye-opening. Writing it all out helps identify some surprises, and then we can take action and be accountable for the changes we plan to make. It starts with a budget plan, and the process of carrying out the budget plan is an ongoing and often changing endeavor.

 

How to make a monthly budget in Excel?

The worksheet I’m providing for you free is in PDF. Are you interested in an Excel version monthly budget calculator?

Here you go:

$2.00 – Purchase Checkout Added to cart

But wait! I expanded the Excel budget workbook to include an income and expenses tracker for the entire year. I’m now offering a budget and expenses calculator workbook to help a fellow working mom out. This workbook contains the budget planner, monthly and annual tracker, as well as goodies like a savings tracker, a debt payment tracker, net worth calculator, and more!

$10.00 – Grab the Yearly Budget Workbook Planner Checkout Added to cart

 

Over to you – how do you make your monthly budgets?

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This post is part of the 31 Tips for Working Moms series. See the rest of the posts here: