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How To Set Up a Budget

From an Article posted on The Balance By Miriam Caldwell
Updated July 22, 2017

Setting up a budget can be a daunting task. There is no reason to be intimidated by this process. Once you have set up your budget you can easily see where your money is going and how much you have left to save and spend. Just follow these seven easy steps.

Determine Your Income

You need to know how much money you will have each month to meet your expenses. If you are starting a new job you may want to use a payroll calculator to determine how much money you will bring home each month.

You may be surprised at the figure. If you have a variable income, you will need to set up a different style of budget, and learn to manage your irregular income carefully. It is important to know exactly how much you have coming in so that you know how much you can afford to spend.

Determine Your Fixed Expenses

Your fixed expenses are items that will not change from month to month. These items can include rent, a car payment, car insurance, your electric bill and your student loan. You should also include savings in this category as well. It is important to pay yourself first. Ideally you should put at least ten percent of your income into savings each month. Your fixed expenses are bills that will not change from month to month, but once you have set up a budget you may be able to reduce those monthly expenses by shopping around for new plans.