How to Make a Budget Plan

Making a budget plan is a process of deciding how much money you want to spend on specific things in a given month. Many people track their spending only to see where the money went, after it was already spent. A spending plan, or budget, instead gives you the control and allows you to designate where you plan to spend that money. Planning expenditures ahead of time helps you stay on top of bills while also setting aside extra cash for other purchases you might like to make.

Write down all of your regular bills and expenses such as electricity, rent, groceries and insurance.

Write down the amount of money you need or want to spend for each bill or expense each month.

Add together the total amount of money you want or need to spend for all your bills and expenses, then subtract that total from the income you receive each month.

Adjust the monetary amounts you assigned for each bill and expense category as needed, to make sure you're not planning to spend more money than you make. If your income is more than the total planned for spending, you can increase spending amounts for one or more categories, or add extra categories to put aside money for things such as emergencies and unplanned expenses, or a vacation.



About the Author

Kathy Burns-Millyard has been a professional writer since 1997. Originally specializing in business, technology, environment and health topics, Burns now focuses on home, garden and hobby interest articles. Her garden work has appeared on and other publications. She enjoys practicing Permaculture in her home garden near Tucson, Ariz.