June is coming to an end and that means it is time to get your budget prepared for July! If you are new to budgeting or just need a little refresh, hopefully this post will be useful for you. To start, click HERE to download a copy of our Monthly Budget Tool.
Once you have the tool downloaded, you can begin entering your income and each of your expenses. Remember, you are doing this BEFORE the month has started and before you have any of this money. This will allow you to have control of each and every dollar that will leave your pocket.
First, enter any income you expect to receive in the income section of the budget. This could be money from a paycheck, a bonus, side job income, child support or alimony.
After you have completed this step, you can begin entering your expenses for the month. It is very, very important to enter in all of your expenses for the month. This includes money that you are going to save, invest and give. You are “spending” every dollar of your paycheck on paper first.
The budget form has some excellent features built into it.
- If OUTGO exceeds INCOME, the TOTAL will turn RED and tell you how much you have overspent!
- If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and will tell you how much more money needs to be named!
- When INCOME = OUTGO, the TOTAL will turn GREEN … This is the ultimate goal!
Even if the budget TOTAL turns RED, keep typing in the expenses that you know are going to happen in the upcoming month. The goal is to get all of the known expenses for the next month on paper.
YES, you will later have to remove some expenses or boost your income to get to GREEN, but the goal right now is to get all of the expenses into the budget form! By having all of the expenses in the budget, you can make a much more informed choice on what will be removed from the budget.
Enter ALL of the real, actual expenses that will need to be paid NEXT month into your budget form.
If your OUTGO exceeds your INCOME, you can either increase the income or decrease the outgo. Increasing your income might mean picking up a second job, or working extra hours. Decreasing your outgo might mean deciding to spend less on entertainment and dining out in order to make sure that your dreams are still fully funded. Remember, a little sacrifice right now can make all the difference in changing your life forever. If you are sick of living paycheck-to-paycheck, I highly encourage you to starting using a written budget today.
Once you have spent all your money on paper, print out your budget and hang it somewhere that you can see it. The last thing to do is actually follow the budget. You have taken the time and energy to prepare a budget that works. YOU told your money where to go so now just follow through.
Take some time to sit down with your spouse in the next few days to prepare a written spending plan for July and start winning with your money today!
Want more tips like this one? Subscribe to the Monday Money Tip Podcast HERE.