Budgeting... not the most fun math problem to do, but for us who just wonder where the money went from the beginning of the month to the end this is something you most likely should do. After all seeing one's checkbook go into the red is a heart stopper for most people. In this I will be roughing out the best way that I am familiar with doing a budget that will work for a single person house and up to four methods of income, may it be a spouse or if you sell things online and gain a small or large profit though that (hey don't judge, people buy some crazy stuff on e-bay).
Ok, lets get started! Here is the fun graph, you can get any graph like this on Microsoft Excel under the templates you can easily download. I tend to go with the ones that have basic columns that you can customize for your needs. However do make sure that the tree colors with money include the three depicted, Budget, Actual & Variance all are important (though one should keep the details to the left, most people don't remember what they had for breakfast yesterday never the less what that number on the budgeting chart that you started last month).
The reason why budgets are usually done per month is because of the annual bills. Bills usually come around once a month, like a gym membership, Netflix, or your rent/mortgage.
Now I know this looks like a big chart with lots of numbers, but yeah it is, sorry no fun shapes here. However, its more of a fill in here chart and so is fairly simple in the end. Budgeting is usually made for one month but will be more confirmed with the second month once you really focus on what you spend in a month though there will be some variance of course.
Ok, now on to explaining the chart part! Ok, in the first section you will see the four methods in income available to you. Say you are just a one person home, put your annual monthly income in said slot. Just repeat the same number over if you are on a fixed hourly rate and know you are getting the same paycheck monthly. If you get a varied amount of pay each week, the second column is for you. One month you may get $1000 but the next you could get $1500. Try to budget toward the lower end of your possible hours/pay check. There is no good way to get out of budgeting for money that isn't there. If by the end of the month you have more money they you budgeted for, hey thats money toward your savings or take out! (I prefer Chinese, but whose picky)
You can do this chart on paper as well, but in a personal experience, its easier for the computer do to all the adding then your fingers and a calculator. [ If you do want to do this on a paper pad Its in my suggestion to get something called a columnar pad. Yes funky name as it is, its the best chart I know of to do this written out. They are available at office supply stores like Staples and Office Depot. and they look like following image. They usual come in a pack of four]
Moving on...
First section off the income section of your chart. Title your next section, Fixed Costs. Fixed costs are the costs like your rent, car payment or anything you know you are going to be billed every month guaranteed, no variance. Copy these amounts in the next column, just least the variance column free.
Section off that part, next section will be your Semi Variable Costs. Semi Variable costs are things like gas, Groceries, Dinning out basically stuff that you are pretty sure that you will do in the month but don't usually spend the same amount every month. This is the part where is gets a little harder, unless you are a good person and keep all billion receipts and keep them in your checking book you may have to do some guess work. Try to budget a little high unless you are sure you spend that say $50 dollars on gas per month. It will pay off in the end if you guess a little high and say $55 or $60 dollars instead.
Ok, now we get to use the second column in a more functional way. This second column is the reason why people write down their expenses in a check book and keep receipts, so they can track their expenses. This is also why budgeting can be more confirmed over two months instead of right away. While you adding all these expenses up, you put the totals next to the section of the chart you have started but under the Actual column. This its an easy subtraction problem if you are setting this up by your own chart in Excel [ex. A3 = A1 (Budget) - B1 (Actual) ].
Last section Highly Variable Costs. Now as the tittle of the section may suggest this more goes for us who are splurge shoppers or just one of those nice people who buy people things like birthday presents. These usually you can guess how much your going to spend but sometimes that video game or shirt screams out at you and you have to buy it. This section can go totally topsy turvy so like i've suggested though the chart, highball this unless you know you can keep your spurge shopping in check.
Past this point of adding in your actual costs for the month in the Actual column of your chart its basic adding and subtracting of the final column of your chart. There may be some red or negatives but if its mostly green, I wouldn't worry about it. Sometimes your over spend and it happens.
After you add that last column together you will see if you are in the green or the red. If you are in the red I would go back though your chart and see where you money is being spent unwisely. Maybe you don't need to go to the hair salon twice a month, and instead that money goes toward gas. Or you don't need that new video game and instead use it toward your groceries (but hey who doesn't live off ramen noodles, yeah! Scurvy!).
The money at the end of the chart is the excess, I'd put that away in a bank account somewhere just incase some costs come up that you don't expect, like your need a replacement tire or you need a extra trip to the doctors that you weren't expecting. The money you put aside will help you in the long run, trust me.
Hope this helped!
