How and When to Budget

The most important thing about saving is “to start”. You may say I have tried and tried and I always end up breaking my budget. I have tried method after method only for it not to work, to not meet my goal.

Here is the thing that you need to understand, it is time to “pull up your underpants” and try, try, try, again. It takes a real desire to not only pay your bills and break even and know where your money is going but also to help you plan to save.

So let us take a look at budgeting. What one needs to know is four things about budgeting that are essential:

  • Income (gross money you make before withholdings)
  • Expenditures (things you spend money for)
    • Fixed
    • Variables
  • A Sink Fund
  • A long-term Emergency fund (usually 3 to 6 months wages)

The idea behind a budget is to know when your money is coming in and what your spending on. Basically, it’s how much money do you need to live every day.


Step 1- in a notebook, look at what you spent the previous month, look at what you look need to spend for the future month. To do this, if you work hourly and have locked hours– say 40 hours weekly.

1. multiply your pay rate by 2,080 hours per year, and divide it by 12 months per year.


$15 X 2080 hours = $31,200

$31200 / 12 = $2,600 monthly gross

2. Add up all your expenses for the month, grouping the items by fixed expenses, and variable expenses, things you pay for seldom or sometimes every month.


Examples of fixed: Rent / Mortgage, utilities, car insurance, renters insurance, electricity, gas, water, sewage, and school loans savings

Variable/incidental: would include a cell phone, food budget, entertainment, child care, family mad money, vehicle maintenance, vehicle fuel, dining out, etc.

Add the totals. For the sake of our example above, my expenses total $1,800.00.

This means I might have a surplus of about $1,800. That is only the case if we accounted for all of the expenses we need to track.

For you, did you forget:

  1. Your savings allocation
  2. Your “mad”, spending money
  3. Your annual, once-a-year expenses like car registration sometimes car insurance.

Now, it looks like we have about $800 to spend. In my next blog, we will view the details of this budget to see if there is any way to cut expenses or increase our income.

See you next blogging session: How to Save.

Please leave any comments in the comment section or leave your contact information.

Disclaimer: I am not a professional, but I merely use this blog site to share methods that I have tried and others may use. I have had some success with some of the tips I offer, it is a constant life task. May it help those who have never actively tried to manage budgeting, spending or saving. If you seek assistance with your personal budget please contact a professional for advice.


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