How to Budget Monthly Money for Bills
- 1). Tally up your monthly income. Monthly income determines how much you can afford to budget for expenses. If your income is variable (such as commissioned sales), average together the past 12 months of income to estimate your monthly income. Otherwise, use the net income amount from your pay stub.
- 2). Create a list of monthly expenses. List expenses including housing, transportation costs, utilities, food, debt payments and entertainment. Make sure you include everything. Subtract this number from your income to determine whether you have funds left over. If you do, consider boosting contributions to your retirement savings account or paying more toward outstanding debts. If you face a deficit between expenses and income, it's time to cut costs.
- 3). Look for ways to trim expenses. If you commute to work, transportation costs can be a large expense. Join a carpool or consider using public transportation a few times a week. If food is a large culprit, consider scaling back on eating out. Packing a lunch instead of eating out can reduce costs.
- 4). Evaluate your success. Creating a budget isn't a perfect formula. Each month, evaluate each spending category. Determine how much you spent versus how much was budgeted. If you overspend in entertainment and under spend in utilities, you may be able to reallocate funds.
