Examples and Information

Template

For this template, there are three separate sections: Fixed Expenses, Flexible Expenses, and Income.

Look at the items in your life that are constant, your rent is probably one, while a car payment may be another. These are expenses that you know you’ll have to pay each month. While some of these may change from month to month, such as your utilities or credit card payments, you know you’ll have to pay them despite any changes in charges. Go ahead and plan for these, get them all on the spreadsheet, making note of any others not mentioned above.

Next look at your Flexible Expenses; the things you may be able to change or bend from month to month. These are items that are basically necessary, but that you can cut back on if necessary. For example, if you find you’re spending way too much for you budget on fast food or eating out, you can change your habits to bring down your “Food” figure. Once you’ve found a good balance for your flexible items, add your Fixed and Flexible Expenses together to find your Total Expenses.

Finally, look at your income. This can include any money that comes to you, be it a salary, allowance, or student loan payments. If looking at your salary, make sure you are looking at your “Take-Home” pay, only accounting for the money you’ll receive after taxes and other withdrawals. Add up all your sources of income to find your Total Income.

Now subtract the Total Expenses figure from your Total Income to find any remaining amount. You may find that your expenses outweigh your income, at which point you will have to revisit your Flexible Expenses to look for areas to cut. If you find you have more money left over after you’ve looked at your budget, you may want to look into adding money to your saving or investing plans, paying extra money down on your debt, or building a backup emergency fund, in case you lose your job or have an emergency.

These are the basics of budgeting. For a more complete discussion, take a look at the "Budget Help" sections of PersonalBudgeting.com and PracticalMoneyskills.com

Some things to consider:

Don’t forget incidental items. You may look at “household” and think “I don’t need to get anything for my apartment,” but don’t forget someone has to buy the toilet paper, trash bags, and light bulbs.

Look for expenses that can be cut that will have a second benefit. Quitting smoking may save you money each month, but it can also improve the quality of your life. Going to the gym an extra two hours a week instead of going to the movies will save you money, but it can also help you look and feel better.

Make sure you’re including a saving or investment figure in your budget. As you’ll see in our Saving section you can really help your future by putting money away now.

Pay attention to your transportation amount. Of course you know your car needs gas, but don’t forget oil changes and other routine maintenance. If you travel on toll roads or regularly pay to park, you will want to include these figures in the transportation amount.

If you’d like to look ahead to life after college, you may want to talk with some friends who’ve graduated about their expenses, and you can also check out the average starting salary for various entry level positions.