How to Control your Money Through Budget

A budget can help you pay your bills on time, cover unexpected emergencies, and reach your financial goals—now and in the future. Most of the information you need for your budget is already at your fingertips. This guide explains how to create a budget and stick to it.

QUESTION YOUR NEEDS AND WANTS What do you want? What do you really need? Evaluate your current financial situation. Take a look at the big picture. Make two lists – one for needs and one for wants. As you make the list, ask yourself:

• Why do I want it?
•  How would things be different if I had it?
•  What other things would change if I had it? (for better or worse)
•  Which things are truly important to me?
•  Does this match my values?

2. SET GUIDELINES We all have different budgets based on our needs and wants. But the Building a Budget chart on the next page shows some guidelines on how much should go toward different expenses. You may need to make  djustments for a daily latte fix or visits to family, but remember to subtract amounts from other areas if you do.

3. ADD UP YOUR INCOME To set a monthly budget, you need to know what’s coming in. Make sure you include all sources of income such as salaries, interest, pension, and any other income sources

4. ESTIMATE EXPENSES The best way to do this is to keep track of how much you spend each month. Categorize spending depending on your needs and wants. Use the Budget Worksheet in this guide as a starting point.

5. FIGURE OUT THE DIFFERENCE Once you’ve created your budget, keep records of your actual income and expenses. This keeps you aware of the difference between what you budget and actually spend

TRACK, TRIM AND TARGET Once you start tracking, you may be surprised to find you spend hundreds of dollars a month on eating out or other flexible expenses. Some of these are easily trimmed. Cutting back is usually a better place to start than completely cutting out. Be realistic. It will help you to be better prepared for unexpected costs.

The SMART Way to Trim Expenses

In finding ways to trim flexible expenses, it helps to have a goal to save toward each month. Setting such a goal needs to be SMART:

SPECIFIC Smart goals are specific enough to suggest action. Example: Save enough to visit Rome for your wedding anniversary. Not just “save money.”

MEASURABLE You need to know when you achieved your goal or how close you are. Example: A trip to Italy costs $2,000, and you have $800 saved.

ATTAINABLE The steps toward reaching your goal need to be reasonable and possible. Example: I know I can save enough money each week to purchase that trip to Italy.

RELEVANT The goal needs to make sense. You don’t want to work toward a goal that doesn’t fit your need. Example: We would like to stay in four-star hotels in celebration of our anniversary.

TIME-RELATED Set a definite target date. Example: I want to go to Italy by next summer.

BUILDING A BUDGET

This chart shows some rough guidelines on how much of your income should go toward different expenses. If you live in an area where transportation is higher than normal or rents/mortgage are higher, you may need to make adjustments. Also, if you would like to add a section for gifts, or something else, then you'll need to subtract from another area.

Ideal Percentage	Expense Head
30%	HOUSING
18%	TRANSPORTATION
16%	FOOD
8%	MISCELLANEOUS
5%	CLOTHING
5%	MEDICAL
5%	RECREATION
5%	UTILITIES
4%	SAVINGS

Budget Worksheets

Monthly Net Income
Salaries	Rs
Rent	Rs
Interest	Rs
Other	Rs
Total Income	Rs

Monthly Variable Expenses
Food	Rs
Entertainment	Rs
Traveling	Rs
Mobile	Rs
Debt Payment	Rs
Other	Rs
Total Variable Expenses	Rs

Total Monthly Fixed Expenses
Housing	Rs
Utilities	Rs
Transportation	Rs
Health	Rs
Other	Rs
Total Fixed Expenses	Rs

Total Expenses (Fixed and Variable Expenses) Rs

Monthly  Summary
Total Monthly Expenses	Rs
Total Monthly Income	Rs
Total for Saving and Investment	Rs