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How to Make and Use a Budget

A budget is a plan that shows you how you can spend your money every month. Making a budget can help you make sure you do not run out of money each month. A budget also will help you save money for your goals or for emergencies.

How do I make a budget?

Write down your expenses. Expenses are what you spend money on. Expenses include the following:

Bills

  • Bills that are the same each month, like rent
  • Bills that might change each month, like utilities
  • Bills you pay once or twice a year, like car insurance

Other expenses, like these:

  • Food
  • Gas
  • Entertainment
  • Clothes
  • School supplies
  • Money for family
  • Unplanned expenses, like car repairs or medical bills
  • Credit card bills

You might have bills that change every month. Look at what you paid for the same month last year. You might need $200 for your gas bill in January, but $30 in July.

Write down how much money you make. This includes your paychecks and any other money you get, like child support.

Subtract your expenses from how much money you make. This number should be more than zero. If it is less than zero, you are spending more money than you make. Look at your budget to see what you do not need or what you could spend less on.

How do I use my budget?

You can use your budget every month:

  • At the beginning of the month, make a plan for how you will spend your money that month. Write what you think you will earn and spend.
  • Write down what you spend. Try to do this every day.
  • At the end of the month, see if you spent what you planned.

Use the information to help you plan the next month's budget.

U.S. Federal Trade Commission (FTC), Consumer.gov. (n.d.). What to do. In Making a budget. Retrieved June 21, 2024, from https://www.consumer.gov

More about this Topics

  • General Budget Worksheet

  • Personal Finances and Budgeting

  • Ways to Increase Income and Resources: Checklist

  • Making a Budget: Worksheet

  • Coping with Financial Stress

Other Topics

    • Child and Spousal Support
    • Money Management: A Planner
    • Build an Emergency Fund (Part 1)
    • Create a Budget and Stick with it
    • Ways to Save Extra Money
    • Make Your Money Work for You: A Debt Management Plan
    • 8/15/23 Digging Deep
    • Financial Fitness: Living Within a Realistic Budget
    • Effective Budgeting
    • Your Financial Checkup
    • Financial Basics Handbook