Free Financial Advice

Planning a Family or Personal Budget

Here are some tips on how to create your own home budget, complete with a sample budget form and a budget worksheet.

Understand and estimate your current spending patterns.  Track your monthly spending and try to account for every dollar spent.  For the next month or two, think very closely about how your money is spent.  Every time you buy something, pay a bill, or dispose of any of your money, make a strong mental note of what it is being spent on.  Better yet, at the end of each day write down a list of each expenditure and what it was used for on a piece of paper or a spreadsheet.  Try to think critically about each dollar spent and whether or not it was a required expense.

Create your current budget.  Now it's time to create your current family or personal budget budget.  To do this, you need to quantify all of the spending patterns you observed in step one.  Start by downloading our rather detailed Free Excel budget template spreadsheet or go to our browser based sample budget (a very simplified version).  If you use the Excel spreadsheet you'll have to know how to use Excel well enough to tweak the formulas yourself.  After downloading the personal household budget template, proceed to fill in the cells by classifying all the money you currently spend into the appropriate categories. (If you would like to use a low cost professional budget software package for your PC or Palm Pilot, click here ) The budget should resemble your current personal or family spending patterns, so be sure not to overlook small or routine expenses.  Be realistic and honest with yourself and try not underestimate your actual expenses.  Think long and hard about how much money you have really been spending on these categories and fill in realistic amounts.  Make sure you account for EVERYTHING you spend, even if you don't see a specific category on the budget template, add those expenses to "other" or create a new category that fits your needs.

Change and improve your budget to meet your goals.  Now that you've quantified what your current family or personal budget looks like, you'll want to scrutinize it very closely and look for areas to improve.  First, define the goal of your budget:  Is it to save money?  to understand where you are spending your money?  to be able to pay down credit card debt?  to be able to pace your spending so that you don't get into trouble?  to find out where all your money is going?  Regardless of your goal, there are always ways to improve your personal or household budget.  Here are some tips on how to improve your budget:

• Try to reduce your expenses (click here to find ways to save money)

• Control your spending and cut spending to areas that are higher than you expected

• If possible, increase your income (click here to find ways to make money)

Stick to your budget and don't give up!  The most important step in financial planning and budgeting is to both be realistic and to stick to your budget.  If the goal of your budget is to save $100 each month and you aren't able to save any money the first month, don't give up!  Repeat the steps outlined on this page and find out why you weren't able to meet your budget (was it unrealistic? did something unaccounted for come up? did you misspend?).  More importantly, adjust your budget as you go and don't give up on the process.  The more you scrutinize and understand your budget, the better luck you will have sticking to it and meeting your goals.  Good luck!!