Where Do You Stand?

Now that you have compiled your income and expenses it is time to do the grand totals! All expenses are totaled and then subtracted from the total income figure for the month. Next, divide total expenses by the frequency of income or the number of paychecks the household receives each month. This will tell you how much money to set aside each paycheck. If the expense total is greater than the income total, you are off track financially.

You must begin to prioritize expenses. Keep track of when you use credit cards. Then ask yourself if you want to borrow every month for these expenses. Each month, enough savings should be set aside to cover fixed and some flexible expenses.

This reserve method will save you from living paycheck to paycheck. Review the spending-plan each income-period to start. At the end of each month, compare actual expenses against what you budgeted. As time passes, you may want to only perform this comparison on a quarterly basis.

End of the Month Budget Analyzer

After the second month of using your budget, utilize this sheet to compare what you’ve actually spent and the amount you’ve budgeted. This will give you a clear picture of how realistic the amounts you budgeted are for each item and will allow you to be more accurate when doing your next monthly budget.

End of Month Budget Worksheet

Tracking Expenses

Tracking Your Expenses Can Help You In Two Ways:

I. Give you an understanding of how much and where you spend your money so you can develop accurate categories for your budget. The budget sample we use in this manual has suggested categories but they may not work entirely for you. It may be more helpful to develop categories that best represent areas where you spend money. Some examples that might be unique to a particular person would include: eating out, books, and CDs, workout classes, charitable giving, or whatever category fits for you.

II. Confirm whether the amount you budgeted equals what you actually spent in a particular category each month. Many of the changing expenses entered on the budget sheet initially come from our best guess of what we spend. If you want to increase your control over your spending, you need to understand and evaluate where your money is going.

Some Helpful Hints To Help You Stay On Track:

  • Develop a support system or buddy system so you can check in with each other and provide encouragement when you lose motivation.
  • Don’t let the receipts or paper build up. Find a system that works for you whether it is a nightly ritual or a Sunday practice over your morning coffee.
  • Make a commitment to track your expenses for at least 2 weeks or a month if possible.

Budgeting Worksheet Part 1
Budgeting Worksheet Part 2

Budgeting Worksheet by Pay Period

It is important that you know which paychecks will cover specific bills so that you will have a plan that assures that you won’t have any late payments. Many companies are using a new system to scan checks so that payments will be processed more quickly.

Therefore, consumers need to make sure that the money to pay their bills is available in their checking account when they mail the payment out.

Budgeting Worksheet by Pay Period

Identifying Spending Leaks

Many people don’t think they can afford to cut anything from their regular expenses. Yet, upon close analysis, many people discover they have “spending leaks,” or expenses that sap money from their budgets without them really noticing or without adding a lot of value to their lives. They are often incidental items that seem small in the moment but add up over time.

Potential Spending Leaks
Sample Spending Leaks

Continue to the next budgeting lesson