Creating a Home Budget

Now that you're out of school and are financially responsible for yourself and perhaps for your partner, it's time to sit down, review your finances and create a home budget. Building and sticking to a budget can seem painful and boring, but in the end, it will help you reach your financial goals and keep you from spending too much. Over time, you'll get into the habit of budgeting and you won't even remember what life was like without one.

Expenses and Income

Before you can budget, you need to know how much money is coming in and how much you are spending or setting aside. The quickest way to track your expenses is to carry a notepad with you and jot down each expense, such as a latte or candy bar, after you purchase it. Collect your receipts and bills for the month and total everything up. Add your pay stubs, interest statements and any other income generating source to determine your monthly earnings.


The method you use to create and keep track of your budget should be one that you are comfortable with. You may enjoy using a software program that automatically links to your bank and other accounts and sends you due date reminders, or one that uses charts and graphs to show your spending and income. If you use multiple computers, you may benefit from a web based program that can be accessed from anywhere. If you want something simpler, use spreadsheet software to create a budget or stick with a pen and paper budget.


A budget will prove more useful to you in the long run if you use it to set and keep goals. Consider your financial goals for the moment and for the long term. If you would like to start saving for a house, make that a category in your budget. You can also use your budget to pay off any debts you have, such as lingering credit card debt or student loans.

Trimming the Budget

After you've calculated your expenses each month and added in your financial goal, you may find that your income doesn't quite cover everything. You may need to adjust your expenses by trimming luxury items, such as daily lattes or expensive shoes, so that you can pay off debt or reach other goals. In some cases, you may need to trim other, more necessary things in order to make ends meet, such as cutting your electricity usage or getting a less expensive cell phone plan.

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