So it’s time to face the budget and you need a place to start. Making notes on bills and random slips of paper just isn’t cutting it anymore and you need an organized way to track your income and expenses. You are probably wondering where you should start and what information you’ll need to come up with. There are many money programs out there, and they can be very helpful. They do all sorts of calculations for you, from balances to your financial goal progress, but sometimes doing it yourself can make things seem a lot clearer. Whether you decide to keep track of your income and expenses electronically or on paper, the process is basically the same.



You can use a spreadsheet program on your computer to keep an electronic log of your expenses. Ledger books are great for tracking everything on paper. The first section you’ll need to work on will be the income section. Write down all of your sources of income, their frequency and their amounts. It’s a little easier to plan if you make columns for the expected amounts as well as for the actual amounts. Make a column at the bottom for the total income received. You can decide if you want to plan for a weekly or monthly income/expense report.

Once you’ve figured out your monthly income, it’s time to get your bills together and get started on the expense section. Start with major bills, such as rent, mortgage or car payments. Go through all of your bills and write down the projected amounts for each bill for that month. Some companies will let you average your bills and pay a set amount each month, making it much easier to budget for bills that change seasonally, such as power and gas. Round up credit card and loan payments to the amounts that you would like to pay. Keeping rounded numbers can make things simpler. When you pay your bills, input the actual amount paid into the next column. This will help you determine if you’ll need to change your projected amount to be paid in future months.

The next step is tracking the expenses that may be a little harder to predict. Keep your gas and grocery receipts, as well as receipts for money spent on clothing, dining, haircuts, or whatever extra comes up. Try to categorize or even sub-categorize things that you normally spend money on, and leave room for extra things like birthday gifts or trips so that you can track them as well. As time goes on and you compile more and more information, you’ll be able to better budget for things that will come up. Use the past year’s charts to check your progress and to help predict the times that you’ll need extra money. For instance, you may not have realized last year that Christmas gifts and travel would cost so much, but this year you’ll be ready.

This brings us to our last section. Create columns for your savings goals. Maybe you’ll want one for a summer vacation. Calculate how much you’ll need by when, and consider it a bill that you pay to yourself. If twenty dollars a week can get you to the beach by July, then send twenty dollars a week into a savings account for yourself and mark it off your list each week. If saving for your children’s college is important, then you’ll be able to track your progress. Personalize your plan as much as you’d like. Keep track and be diligent about inputting all of the information that you can. Your reward will be less stress, more control and having a more predictable financial future.