budgeting

How to Make a Monthly Budget That Works

You don't have to reach the end of the month wondering where your money went. Doing a budget is simply telling your money where to go. And if you're not good at budgeting yet, that's okay! It takes a little time. By your third budget, you'll be a pro.

1. 

   1) Write down your total income for the month.

   This is your total take-home (after tax) pay for both you and, if you're married, your spouse. Don't forget to include everything—full-time jobs, second jobs, freelance pay, Social Security checks, and any other ongoing sources of income.

2. 

   2) List all your expenses.

   Think about your regular bills (mortgage, electricity, etc.) and your irregular bills (quarterly payments like insurance or HOA) that are due for the upcoming month. After that, total your other costs, like food, gas, and entertainment. Every dollar you spend should be accounted for.

3. 

   3) Subtract expenses from income to equal zero.

   This is called a zero-based budget, meaning your income minus your expenses should equal zero. If you're over or under, check your math or simply return to the previous step and try again.

4. 

   4) Track your expenses throughout the month.

   Once you start the budget, you'll still need to stay on top of your expenses. The good news is that EveryDollar makes tracking your expenses (and budgeting for them) extremely easy. Visit EveryDollar.com to learn more!