Part 3 – Creating my Budget
To create your budget, you’ll need to know how much money you expect to receive next month, how much you think you will need for expenses, and how you will prioritize your spending.
As I review my Expense Tracker and Income Tracker from last month, I think about the upcoming month and consider whether:
- any of my income will be the same or different? Will I have any additional sources of income or will I have fewer sources of income?
- my expenses will be the same or different? Will I have more or fewer expenses?
Keep in mind that not all income and expenses are regular. Some income streams may be variable where the source is the same but the amount or the frequency is different each time (e.g.: a casual job or commission-based work) and some expenses may be irregular with a different source/amount/frequency (e.g.: buying school supplies or gifts). Make sure that you enter these estimated income and expense amounts in your budget.
When budgeting, the goal is to have a balanced budget. Enter income first, followed by expense priorities, needs first, followed by wants.
It’s imperative to use the tracker for all income and expenses to get a clear idea of incoming and outgoing money. This allows me to find out how close my estimates are and if I need to make any adjustments next month, and so forth. It will also help me know exactly how much I am spending, rather than just having a general idea. I’m able to see what I spent money on and determine if it’s a regular expense or occasional, or if I am overspending in a certain area.
Reviewing my budget from last month and figuring out if my estimates are accurate or not helps me ensure my budget is balanced. Tracking everything that I spend money on lets me know if I am sticking to my spending plan or not. Doing all of this on a regular basis will show me what wiggle room I have to spend more on the fun stuff, put money aside for a vacation or adjust plans to spend less where I’m overspending.
PRO TIP: Plan for the least amount of income and the highest possible cost on your expenses.
Next time I’ll share how this went for me and provide you with additional tips, tools, and resources. Stay tuned!
~ Jeff Patteson
Recognition Counts Loan Coordinator
SEED Winnipeg Inc.
For more information, visit SEED Winnipeg Inc.
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