Create Budget

 Create A Budget

Take control of your finances - spend less than you earn Click Here for Details

Create A Budget to Take Control of Your Finances

It's easy to get into a cycle of overspending and unnecessary debt. Take control of your finances by setting up a plan to spend less than you earn. Our worksheet and these step-by-step instructions will get you started.
  1. check your monthly spending
    For one month, record every dollar you spend, whether it's by credit card, cash, check, or Check Card.

  2. Itemize your income and expenses
    Use our Budget Planner Worksheet and prepare a detailed account of both your income and where you¡¯re spending your money: housing, food, loans, entertainment, etc.

  3. Compare your after-tax income with your expenses
    The key is always to spend less than you earn. What does your bottom line look like?

    • Positive cash flow. Do you have money left over? Then you're spending less than you make and are probably in good shape. You could apply the extra money to one of your credit cards or other debts, or increase your savings or investments.

    • Negative cash flow. If your expenses are more than your income, figure out how you can cut back on your expenses. If you can't find ways to cut expenses, then step back and evaluate what you currently view as "necessities." They may actually be luxuries that you can live without.

Save for the future

It's a good rule of thumb to have three to six months' worth of living expenses in emergency savings. Once you've figured out your monthly budget ¡ª and seen that you can stick with it ¡ª try to save three to six times that much in a savings account or investment you can easily access. That way if you lose your job or have a medical emergency, you don't have to max out your credit cards or skip loan payments.

If you're trying to save for a big purchase, like a house, you'll probably need to save more. See where you can cut back further on expenses, but don't make a plan so strict that it's impossible to follow. It's better to have a plan that takes longer than to try to save so much at once that you don't stick to your budget.

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