Making a budget can feel overwhelming. There's no need to worry; we're here to help. Follow this budget checklist to make the perfect budget for your household.
Key Points
- Make sure you take any interest, dividends, royalties, commissions, and rent you receive into consideration, as well as any other income.
- Your budget may fluctuate over time as your living situation changes.
- Keep an emergency fund for various unexpected events, such as car problems or a plumbing emergency.
Checklist – Budget Worksheet
Income
Wages and Salaries
Wage Earner 1
Wage Earner 2
= Total Wages and Salaries
+ Interest and Dividends
+ Royalties, Commissions and Rents
+ Other Income
= A. Total Income
Taxes
Federal Income and Social Security
State
= B. Total Income Taxes
C. Take-Home Pay (line A minus line B)
Expenditures
Living Expenses
Housing
+ Rent
+ Mortgage Payments
+ Utilities
+ Maintenance
+ Real Estate and Property Taxes
+ Fixed Assets-furniture, appliances, etc.
+ Other Living Expenses
= D. Total Housing Expenditures
Food
+Food and Supplies
+ Restaurant Expenses
= E. Total Food Expenditures
Clothing and Personal Care
+ New Clothes
+ Cleaning
+ Tailoring
+ Personal Care-hair Care
+ Other Clothing and Personal Care
= F. Total Clothing and Personal Care
Transportation
+ Automobile Purchase
+ Payments
+ Gas, Tolls, Parking
+ Automobile Registration/Tags/Stickers
+ Repairs
+ Other Transportation Expenses
= G. Total Transportation Expenditures
Recreation
+Movies, Theater, Sporting Events
+ Club Memberships
+ Vacations
+ Hobbies
+ Sporting Goods
+ Gifts
+ Reading Materials
+ Other Recreation Expenses
= H. Total Recreation Expenditures
Medical Expenditures
+Doctor
+ Dental
+ Prescription Drugs and Medicines
= I. Total Medical Expenditures
Insurance Expenditures
+Health
+ Life
+ Automobile
+ Disability
+ Liability
+ Other Insurance Expenses
= J. Total Insurance Expenditures
Other Expenditures
+ Educational Expenditures
+ Child Care
+ Other Expenses
= K. Total Other Expenditures
L. Total Expenditures (add lines D-K)
M. Income Available for Savings (subtract line L from line C)
Making an Emergency Budget
In addition to a regular budget, you should have an emergency budget. Saving funds for unexpected expenses will help protect you further down the line. Everyone will inevitably run into unexpected expenses sooner or later. They can be as simple as a flat tire, or as catastrophic as losing your job or home.
When making an emergency budget, there are a few events you'll want to consider and save for:
- Natural disasters that damage or destroy your property.
- Unexpected medical or veterinary bills.
- Car trouble, such as a flat tire or engine troubles.
- Losing your job.
- Appliance breaking unexpectedly.
- Plumbing disasters.
- Economic depression.
By being prepared for these events, you'll give yourself peace of mind. How much you budget for each event will depend on your specific living situation. If you can't afford to budget and save for each separate event, then make a general emergency savings fund that can cover part of or all of these potential expenses.
As a rule of thumb, try to save $5,000 towards emergency expenses. This might seem like a lot, but you don't need to save it all at once. Put aside some money every month towards an emergency fund. Try to avoid using your emergency fund unless you absolutely have to. If you're low-income and can't possibly save enough to hit that $5,000 target in a reasonable amount of time, aim for $2,500 instead. Even $2,500 will help keep you afloat during tough times. Open your fund as a high-yield savings account, so it can earn over time.
The content of this article should not be taken as professional financial advice. It is important to exercise due diligence when making financial decisions. Consult a professional financial advisor before making any decisions about your finances.