12 QUICK AND EASY STEPS TO CREATING YOUR BUDGET:

Your Planned Budget represents your goal for next month. Monitor your expenses, and at the end of the month compare them with your budget. Make modifications to your budget as necessary.

Use the Personal Budget Planner to help complete all the steps.

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Step 1.

In Table 1, fill in the estimated dollar amount that you spend on
Essential Monthly Expenses in the column labeled “Current Spending.”
Use the blank lines to describe additional expenses that are not already on the list.

Step 2.

Add the total of all of your Other Monthly Expenses in the Total
Other Monthly Expenses row (first column).

Step 3.

In Table 2, fill in the estimated dollar amount that you spend
on Other Monthly Expenses in the column labeled “Current Spending.”

Step 4.

Add the total of all of your Other Monthly Expenses in the
Total Other Monthly Expenses row (first column).

Step 5.

Write the Total Essential Monthly Expenses number from
Table 1 in the Total Essential Monthly Expenses row in Table 2 (first column).

Step 6.

At the bottom of Table 2, add the Total Other Monthly
Expenses and the Total Essential Monthly Expenses to get Total Living Expenses.

Step 7.

Copy the Total Living Expenses number into the Total Monthly
Living Expenses blank in the formula below.

Step 8.

Calculate your Monthly Gross and Net Income.
Your Net income is your income after income taxes and
other withholdings, like 401k, are deducted.

Step 9.

Copy the Total Net Income number into the Total Net
Monthly Income blank in the formula to the right.

Step 10.

Using the formula above, subtract Total Monthly Living Expenses
from Total Net  Monthly Income. If the number is positive, then
you are living within your budget and should consider investing the
“excess” money in a savings account, money market, or other
investment option, or payoff outstanding debts. If the number is
negative, then you are spending more than your income allows. Go to Step 11.

Step 11.

Review each line in Tables 1 & 2. Determine if you can save additional
money by reducing certain expenses, especially those in Table 2.
Write these reductions in the Necessary Changes column. You may be
surprised just how much money you find without adding any new income.

Step 12.

Write the new values for your monthly expenses in the
Planned Budget columns of Tables 1 & 2 and calculate your Planned Budget.

Congratulations on taking your first step to better money management!