An important part of having a secured financial foundation is creating a budget for your family. A budget can help you with many things for your family. Budgeting can help you learn to control any spending habits that you need to stop.
Learning to budget properly can help you save up for some pretty fun things for your family too! Maybe you want to buy something new for your household or save up for a family vacation.
There is a lot of things you can save up for when you learn how to budget, so with these simple 5 steps you can learn how to create a monthly budget!
Be sure to use one of the following FREE budgeting templates below as you follow the steps below.
1. What’s your income?
Start by making a list of your income. You will want to add up your total monthly wages after any taxes are paid and any other deductions. Don’t add up any cash you don’t earn on a regular basis within your income.
If are self-employed, you will want to use an average monthly income. This will help estimate your expected total income each month.
2. What are your expenses?
The next step is to add up any monthly expenses you have. Start with regular expenses that are fixed to occur each month, such as electricity, water, and groceries.
Make a list of your fixed expenses and the amount of each one. You’ll then want to write down the maximum amount you plan to spend. For example, you might spend $300 on groceries per month or $100 on gas for your vehicles.
One way to easily figure out your monthly expenses is looking at your bank statements. Take a look at your past monthly bank statements to find out what your monthly expenses are. Make sure you don’t leave any expenses out as you fill out one of the following budget templates.
3. Add it all up now
Once you have figured out your total monthly income and expenses, you want to find your net income. A net income is the amount of money you have leftover after all the expenses have been paid.
Subtract your monthly expenses from your monthly income to get your net income.
It’s important that the net income number is positive. A positive number means you can use that money for other things. You can either put it into a savings account or something you might be saving up for, such as a family vacation or item for your household.
If you end up with a negative income then continue to the next step.
4. Make necessary changes
If you end up with a negative net income number, you are spending more than your monthly income. This is where you need to make adjustments within your spending habits in order to pay for more vital expenses or you might not be able to pay for certain monthly expenses in the future.
Start by making changes to eating out less if you eat out regularly. Are there hobbies or entertainment you enjoy doing but are spending too much in these categories? You will want to cut back on some of these if you are having trouble covering your monthly expenses.
You can always look for ways to cut back on your cable or phone bill by contacting your services to see if they have cheaper alternatives.
5. Keep track of your budget
Once you have figured out your monthly budget, it’s important to track and review your actual spending habits with the budget you have now set. Reviewing your monthly budget regularly can help you stay on track of paying your monthly expenses and saving up for things you and your family might want to buy or do.
Free Budgeting Templates to Use
Use this simple budget to help you plan and reach your financial goals.
Bright and colorful will make this family budget worksheet fun to fill out and plan your own budget!
This monthly template can easily be filled in with these colorful categories.