How to Make a Monthly Budget for One
- 1). Calculate your monthly take home income. If you are paid weekly multiply your weekly net pay on your pay stub times four; if you are paid bi-weekly or semi-monthly multiply your take home pay times two. Your monthly income is the total of what you have to work with during the month.
- 2). Categorize your monthly bills. Take your bills and place them into piles. Put the bills associated with your residence in one pile and make separate piles for other expenses like your automobile and bills associated with it. Use categories that make sense to you, there is no right or wrong way to do it.
- 3). Determine your cash expenses. Many expenses may not appear on your bills, such as food or gas. Consult your bank statement or check register if you frequently use a debit card or pay by check.
- 4). Determine your other recurring expenses. Consider any expenses which you do not have every month. These are items like lawn care, snow plowing, tuition payments, auto insurance, or any other expense which you do not pay every month. Calculate the average monthly amount for each expense; dividing annual expenses by twelve, semi-annual expenses by six, until you have an average monthly amount for each of these expenses.
- 5). Determine your savings needs. Consider short-term as well as long-term goals. Are you saving enough for retirement? Do you plan on purchasing a new car or home? Any financial goals should be listed with a target monthly savings amount. One frequently overlooked savings expense is building an emergency fund. An emergency fund provides additional flexibility in your budget. By having an emergency fund for unanticipated expenses like a major car repair, may help you to avoid using expensive credit cards for these types of emergencies.
- 6). Create your monthly budget worksheet. Write your monthly income at the top of the page. List your monthly expenses and subtract your total expenses from your income. If your expenses exceed your income you should look for ways to reduce expenses or increase income. If your income exceeds your expenses you may want to consider increasing your savings.
- 7). Work with your budget. Frequently a budget will not be perfect from the start. You may find expenses you had not considered. Income and expenses change over time. Adjust your budget as your situation changes.