# How to Create a Personal Monthly Budget

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You will need to compromise with your significant other in creating your personal monthly budget. Ask him what expenses he could cut back on. For example, he may be spending an extra \$50 a week after work during happy hour. You may be buying too many shoes each month. The first step in creating a personal monthly budget is limiting unnecessary expenses. You should both then sit down and discuss your monthly savings goal. Perhaps you need to put more away in a retirement account, or plan for the purchase of a new home.

## Step 1

Calculate how much you both earn per month by adding net income from your pay stubs together. Add any income from a part-time business to that total. Write your total net income at the top of your notepad.

## Step 2

Take out all of your bills, bank and credit card statements. Put similar bills like car payments in one stack, then arrange other bills similarly. Create two columns on your notepad. Label the first column "Fixed Expenses" and the other column "Variable Expenses." Put expenses such as car payments and your mortgage under fixed expenses. Add expenses like groceries, electric and phone bills, entertainment and clothing allowances under the variable expense column. Make sure you also include miscellaneous expenses such as car repairs, hair cuts and club dues under either fixed or variable expenses. Add up your fixed and variable expenses. Write the total down at the bottom of your notepad.

## Step 3

Subtract your total expenses from your income. Write that total down as your disposable income, or the money you have left over each month. Compare your disposable income with your monthly savings goal. For example, subtract your disposable income of \$200 from you monthly savings goal of \$500. Write down the amount in which you are short of your monthly savings goal--\$300, say.

## Step 4

Plug your income and expenses into the budget calculator at Money-zine.com. Compare your expenses with those of the average household, per the Bureau of Labor Statistics. Write down the variable expenses in which you exceed the national average.

## Step 5

Decide how much you can cut from the variable expenses in which you exceed the national average. Cut back on entertainment, clothing and grocery expenses, for example, if you are spending too much on these items. Cut \$300 per month from these variable expenses, if you need that much money to reach your monthly savings goal.

## Step 6

Create a personal monthly budget that reflects the new variable expenses. Review your spending habits every week or so to make sure you are sticking to your budget.