Set a Budget

The very word “budget” makes most of us cringe. Right away, we think of missing out on our favorite things. Instead, think of a budget as a spending plan—a form of personal control that will increase your assets and help you produce wealth.
 
Click here for some questions designed to help you and your spouse discuss money tendencies.
Then, it’s time to put together the basics of your budget.  Use the form here for compiling your information.
 
1. Figure your monthly income – how much money comes in. 
  • What’s your total take-home pay (all in household)? Include income from second jobs, child support, alimony, SSI, etc. 
2. Figure your monthly expenses – how much money goes out.
  • House payment or rent
  • Average utility bills (electricity, gas, water, sewer and garbage)
  • Taxes and insurance (if not in your mortgage payment; renters’ insurance if renting)
  • Telephone, cable television, and Internet services
  • Car payments(s), gasoline, repairs and maintenance
  • Groceries and restaurant meals
  • Clothes, laundry and dry cleaning
  • Toiletries and household goods
  • Church offerings and charitable donations
  • Doctor visits, prescriptions, dental care   
  • Alimony or child support not deducted from your paycheck
  • Debt: credit cards, student loans, any financed appliances or electronics, home equity loans, etc. 
3. Subtract your total expenses from total income. 
  • You’ll either have a surplus or a shortage. If there’s a surplus, you should be in good shape for paying off debt and increasing savings. If there’s a shortage (more expenses than income), you need to reduce expenses, bring in more money, or both, to make your budget balance.  
4. Prioritize your expenses
  • Your mortgage and utilities must come first. Pay these bills before anything else. You need to feel secure in the knowledge that no one  will take your home away from you due to unpaid house payments or rent. Communicate if need be.
  • Some expenses are fixed, but others can be reduced. See our “Control Spending” section for great tips. 
  • To see what you’re really spending, grab a small notebook and write down every cent you spend in a category (say, groceries) for a month. You might be surprised where your money goes. 
5. Set aside time for money management.      
  • Take at least 15 minutes per week to review your bills and budget. Include adults in the household budget discussions. All are responsible for cost of living. This will help you stay on track.

6.  Ask for help. One of the free services offered by Consumer Credit Counseling Service of Northeastern Iowa is budget counseling. Call your local office to set up a confidential appointment today.