Simple Budget Planning

Take a team approach to creating a budget.

Take a team approach to creating a budget.

A budget feels restrictive to some couples, but a simple financial blueprint helps you navigate spending. A simple budget means you can keep track of your spending without getting an accounting degree. If you use the budget to guide your spending, you'll know if you can splurge on those fashion options or stock up when your favorite coffee beans are on sale without using money allocated to bills. Create and follow the budget with your partner so you're both aware of your financial situation.

Save up your receipts, credit card statements and bank statements to get a peek at where all of your money goes each month. Knowing where you're at now helps you divide up your income to create your basic budget.

Calculate 60 percent of your gross income to get an estimate of how much money should go to bills and regular monthly expenses, such as grocery, toiletries, taxes and clothing. For example, if your normal monthly income pretax is $4,000, your goal is to keep your monthly expenses to $2,400. The remaining monthly income should go to retirement, savings, unexpected expenses and entertainment money.

Write a list of all your regular monthly expenses, including housing cost, insurance, loan payments, credit card payments and utilities. If any of these bills fluctuates, use the highest amount to make sure you don't underestimate the amount needed to cover the expense.

Estimate the amount you spend on other necessities that vary, such as groceries, gas and personal supplies. Keep in mind the 60 percent guideline for expenses when allocating funds to these areas. The receipts and bank statements you gathered help you estimate a reasonable amount based on your current spending habits.

Figure in the amount meant for savings and extra spending money. If you have difficulty sticking with your budgeted amount for spending money, withdraw the amount in cash. When the cash is gone for the month, you wait until the next month for extra spending cash.

Look over the budget to find ways to tighten the belt as needed. Personal items and extra expenses are often areas that are easily cut. You might also need to downsize when it comes to your home, vehicle or other larger expenses.

Review your spending habits periodically as compared to your budgeted amounts for each category. Adjust your budget or spending habits as needed.

Items you will need

  • Bank statements
  • Credit card statements
  • Bills

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About the Author

Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience comes from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.

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