** Remember – all persons involved with the budget must be part of the budgeting process and must “buy into” it – if one person does not agree to abide by the budget, it is meaningless! **
If you and your “budgeting partner” have never discussed your attitudes and perspectives about money, you’re having trouble “getting on the same page” or you just want to have some fun during this nitty gritty process, check out the Relationships & Money financial topic.
- Use the Cash Expense Summary to track spending over the past six (or twelve) months. (More about how to use the worksheets.)
- Agree on an amount to be spent on each item.
- Collect data for set expenses – rent/mortgage, estimates for utilities, obligations (a cell phone contract for example), etc.
- For bills that are due other than monthly (quarterly, every 6 months, etc.) set aside an amount each month to save for when that expense occurs (don’t forget Christmas!)
- If you make purchases on a credit card, list the expense only in the applicable category; the credit card line is only for amounts you are paying toward a card on which you are carrying a balance.
- Use the Budget worksheet to guide your planning. (More about how to use the worksheets.)
- At the beginning of the month, agree on the amount to be spent.
- As you spend during the month, or at the end of the month, record the amount actually spent for each item.
- At the end of the month, subtract the amount actually spent from the amount budgeted; the goal is that the total difference equals zero (meaning that if you overspent in one area, you should underspend in another area to compensate).
- Keep in mind that one person can be responsible for completing the budget figures – as long as the other person is aware of the budget and exceptions are discussed.
- Examine the expenses over which you have control.
- Re-evaluate needs/wants.
- Can you save money on any needed items? (Research auto/home insurance rates, etc.)
- Can you save on grocery/entertainment categories by using coupons, frequenting less expensive establishments, or taking advantage of special deals?
- Evaluate purchases for cost-effectiveness and usefulness.
- Make use of a flexible spending account offered by an employer to pay for medical expenses, daycare, etc., with pre-tax dollars.
Be sure to check out the rest of the personal financial planning worksheets, too!
Don’t stop now! Keep going with the Debt Management and Retirement Planning financial topics!
Find out about financial workshops conducted by the Education and Outreach Division of Concordia Plan Services.
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