|
Sample Budget
Using the information gathered from
calculating your monthly income, tracking your day-to-day expenses, and
determining how much you spend on monthly bills it is easy to develop
a monthly budget. While reviewing the initial budget below you will realize
we were spending more than we earned. Thus, to save $125 a month, it is
necessary to cut expenses, earn more money, or both. By working overtime
that increases your take-home pay. Then expenses can be reduced by buying
fewer clothes, discontinuing premium cable TV channels, carpooling to
work to cut gas consumption and reducing spending on eating out and entertainment.
Tracking these expenses paid off. Now we have successfully developed a
budget that enables an individual to save $125 each month. If the individual
sticks to the sample budget below, they will have $125 a month that they
can:
- Put in a savings account.
- Invest in a 401(k) retirement plan at work.
- Invest in an individual retirement account (IRA).
- Invest in stocks, bonds or mutual funds.
- Use to pay off debt.
|
|
Current Income |
Income Changes |
New Budget |
| Salary |
$ 3,335 |
|
$ 3,335 |
| Overtime pay |
$ 0 |
$ 40 |
$ 40 |
| Pension, Social Security benefits |
$ 0 |
|
$ 0 |
| Alimony/child support |
$ 0 |
|
$ 0 |
| Interest |
$ 60 |
|
$ 60 |
| Dividends |
$ 50 |
|
$ 50 |
| Income from real estate |
$ 0 |
|
$ 0 |
| Income from businesses |
$ 0 |
|
$ 0 |
| Other income |
$ 0 |
|
$ 0 |
| Total Income |
$
3,445 |
$
40 |
$
3,485 |
| |
|
Current Expenses |
Spending Changes |
New Budget |
| Taxes |
$ 750 |
|
$ 750 |
| Retirement Contributions |
$ 325 |
|
$ 325 |
| Mortgage Payment |
$ 680 |
|
$ 680 |
| Homeowner's insurance |
$ 60 |
|
$ 60 |
| Real estate taxes |
$ 75 |
|
$ 75 |
| Electricity |
$ 60 |
|
$ 60 |
| Gas |
$ 30 |
|
$ 30 |
| Water |
$ 25 |
|
$ 25 |
| Telephone |
$ 50 |
|
$ 50 |
| Cable TV |
$ 55 |
($ 20) |
$ 35 |
| Car loan |
$ 300 |
|
$ 300 |
| Car insurance |
$75 |
|
$ 75 |
| Maintenance for car |
$ 20 |
|
$ 20 |
| Gas for car |
$ 120 |
($ 20) |
$ 100 |
| Medical & life insurance |
$ 25 |
|
$ 25 |
| Credit card payments |
$ 25 |
|
$ 25 |
| Groceries |
$ 200 |
|
$ 200 |
| Meals out & entertainment |
$ 425 |
($ 50) |
$ 375 |
| Clothing |
$ 130 |
($ 30) |
$ 100 |
| Children |
$ 0 |
|
$ 0 |
| Charitable contributions |
$ 0 |
|
$ 0 |
| School loan |
$ 0 |
|
$ 0 |
| Miscellaneous daily expenses |
$ 100 |
($ 50) |
$ 50 |
| Total Expenses |
$
3,530 |
($
170) |
$
3,360 |
| |
| Monthly Net (income-expenses) |
($
85) |
|
$
125 |
| |
| Available to Save or Invest |
$0 |
|
$
125 |
|
