Updated January 1, 1 . AmFam Team
You’ve got dreams and you’re determined to achieve them. But before you begin tackling your goals, one of the biggest steps you can take to help you move forward is to learn how to make a budget. Being savvy about your finances helps you set realistic expectations, and once you’ve got a firm grasp on your money, you’ll have more control to bring those dreams to life.
We’ve pulled together some tips that will help you get started creating your own personal budget. Let’s get started!
Keep in mind that following a budget isn’t always easy to do right off the bat. It might take some time to get used to. But having a plan written out will help keep you on track. So get out a pen, paper and calculator and follow these steps:
The first step to any budget is determining how much money you actually have to work with. Whether you have a salary or are paid by the hour, remember that you’ll create your budget based on your net income — which is the amount left after taxes and other deductions. You can easily find your net income by looking at your take-home pay.
MONEY TIP: Do you have multiple jobs or a job where you’re paid cash? Make sure you’re adding up all money that’s coming in so you can create the most accurate budget.
A fixed expense is basically any expense you pay that is consistently the same price from month to month. Create a list of bills that you pay every month that are typically the same amount — these form the base for your budget. Here’s a list of common fixed expenses:
MONEY TIP: Once you add up your fixed expenses, subtract the total from your net income and the remainder is the amount you’ll have for your fluctuating bills.
You probably have several bills you pay each month with varying amounts, or costs you spend for necessities or entertainment. If you’re looking to cut back on spending, your fluctuating bills are a great place to start. Fluctuating bills usually include the following:
MONEY TIP: Want to adjust your spending habits to make sure you hit your goals? Try tracking every single penny you spend for a month (apart from those fixed expenses). From a pack of gum to ordering takeout, write down every time money leaves your wallet. You might be shocked at how quickly little expenses can add up and tack on more time to reaching that end goal.
Making a monthly budget is a great first step but it really only works if you follow and review it frequently. If you have a family, gather everyone and get them in the same “money mindset”. Is it just you? Talk to a friend to hold you accountable. It may take some time to get used to, but being diligent about sticking to your budget will pay off — literally!
MONEY TIP: Looking for ways to organize your finances? There’s an app for that! Mint: Money Manager, Bill, Credit Score & Budgeting (Opens in a new tab) is a great way to manage your money. You’ll connect your bank accounts, credit cards, bills and investments so you can track all of your expenses in one convenient place. Download it to your phone and have your budget at your fingertips!
Need help making your monthly budget? Consider using a budget template. It's a great way to simplify your financial planning.
At American Family Insurance, we’re all about encouraging people to pursue their goals. And making a monthly budget is a step in the right direction.
Now that you’ve gotten your finances in order, we’ve got a way for you to stay on top of your insurance, too. Enroll in My Account (Opens in a new tab) to manage your policies, take care of your bill, and make and review your claims. Plus, when you download the MyAmFam app, you’ll have quick access to My Account on the go.
This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.