Creating a Budget Plan

by Redeeming Riches on July 24, 2012

Now, more than ever, individuals and families are working to keep an eye on their finances. At the end of the month, if they are still short on cash and need to pay a few bills, it becomes imperative that they figure out how much money came in, how much went out and where the discrepancy lies. If you are ready to take a good hard look at your finances, see if you can find an income and expenditure form that will help you keep a record of your money and where it goes.


Before you can create a budget plan, you need to know how much money you bring in every month. Most people think to include their paychecks but they forget to look at other forms of income. Have you recently shopped around for the best savings rates? While that income may pale in comparison to the rest of your money, consider marking it down as income as well. Just because you do not spend the money, it doesn’t mean that you don’t want to keep account of it.

It is important to note that the amount of income that you bring in every month is all that you have. If you are spending over this amount, you are digging yourself into debt. You can’t spend more than you have and stay financially sound. On a worksheet or a piece of paper, write down the amount that you bring home after taxes.


Most forms have a place to add your income and then another side to begin subtracting your expenses. All of this information is going to be used to create your budget, so be as detailed as possible and try to be honest with yourself. Don’t fudge the numbers to try to make it seem like you don’t spend that much money. Remember that in this situation, honesty is the best policy.

Take out your monthly bills first. These are usually fairly consistent. You pay the same amount for rent or the same amount for your mortgage. You probably pay the same amount for your vehicle, your electricity and your cell phone bill. These are considered consistent parts of your budget.

There are other expenses that you have a little more control over that will play a big part in your budget. This includes the amount of money that you spend on food, entertainment, clothing and gas. While it may not be easy to put down how much money you spend eating out or going to the movies, you really do need to know how much money goes out each month on these types of things.

Once you have the figures down, you can see exactly what your monthly finances consist of. If you have some money left over, you may be asking yourself where it is going. If you realize that you are in the negative, you have overspent your income. At this point, you need to decide what you can change to balance out your budget.

Come up with an amount that you plan to spend for certain categories. For example, you can create a column for food, clothing, entertainment, toiletries and even education. Determine how much you are going to spend in these categories every month. In order to balance your budget, you may need to cut back on any one of these categories in order to come out on top.

Finally, aside from all the spending, you’ll want to build in some type of savings plan as well. Take some time to shop around for the best savings rates and open an account. Determine how much you are going to save each month and begin making frequent deposits. You will know that your budget is effective when you are saving money and staying within the means that you have set out for yourself.

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