Introduction: Tips and Tricks for Using Your Monthly Budget

Hello! In this Instructable, we will discuss the basic steps to creating a simple budget and balance sheet. This resource can be used by individuals, married couples, families, and more in their pursuit of more financially-stable futures.


This Instructable contains a blank budget sheet pdf and a separate "Tips and Tricks" pdf below. These are great options for individuals who prefer to print out the information or save the files on a computer or mobile device. The remainder of the Instructable is steps to using the blank budget sheet with your own information. The last few steps contain the same "Tips and Tricks" from the pdf.


Happy budgeting!

Attachments

Supplies

  • Blank budget pdf (optional)
  • Paper
  • Pen/Pencil
  • Calculator
  • Monthly Expenses (receipts, etc.)
  • Income Paystubs
  • Asset Values
  • Liabilities Owed (a debt or financial obligation)
  • Computer (if needed)

Step 1: Identifying Your Income and Expenses

To start making a budget, you need to find all your monthly income. Write a list of each type of income and the amount next to it. This income may exist as one or more of the following:

  • Salary
  • Side hustle
  • Food stamps
  • Second jobs
  • Part-time jobs


Next, write down all your anticipated expenses for the month. List the expense types and the anticipated amount of money each cost. Doing so will help you understand where you are financially for the coming month. Below is a list of possible anticipated monthly expenses.

  • Car payment
  • Utilities
  • HOA
  • Mortgage
  • Rent
  • Groceries
  • Phone
  • Internet
  • Cable/Streaming Service
  • Insurance
  • etc.


By compiling all of these, you can begin creating your monthly budget.

Step 2: Making Your Budget

Now that you have written down your income and expenses, you will start to make your budget sheet.

Using the provided budget sheet pdf--or one you have created yourself--, you will first start out with your income at the top of the sheet. Then you will start listing your expenses and subtract them from your income. This will leave you with your net income.

Step 3: Understanding Your Net Income

Net income refers to the amount of money you have left over after subtracting your expenses from your income.


If there is money left over, you are able to pay your expenses with your income. This is your desired goal.

If your net income is negative, you don't have enough income to cover your expenses. This leaves you financially unstable and requires further inspection of your budget.


Once you have figured out your net income, you will have a better understanding of your financial situation.

Step 4: Positive Net Income

If you end your budget with a positive net income, consider paying more toward your liabilities (debts) to increase your equity. Simply put, equity refers to your total sum of assets, which are owned resources (such as a paid-for vehicle or home). Below are some tips for how to put your positive net income to good use.

  • You could use this extra income to make additional payments on expenses such as your home, vehicle, credit cards, medical bills, loans, etc.
  • Try starting with your smallest liability. While this may sound counterproductive, think of it as a snowball effect. Once you begin to pay off this debt, you will begin to be able to pay off bigger and bigger debts with that saved income. 


Doing this provides you with an advantage over your bills and helps you get out of debt faster!

Step 5: Negative Net Income

If you end up with negative net income, look for expenses you can cut. Here are some ideas:

  • Find cheaper solutions to necessities such as:
  • insurance
  • phone service providers
  • transportation
  • food and groceries
  • internet and TV services
  • etc.
  • Simple efforts such as walking to work, cooking at home, or sharing internet service can help ease financial burden. Look for ways you can save money in your personal life.

Step 6: Finding Your Equity

Remember, equity refers to your total sum of assets. Finding your equity will help you understand where you stand financially and help you to make and achieve your financial goals.


Begin by finding the value of your large assets such as:

  • Car
  • Home
  • Collectibles
  • Life insurance
  • Jewelry
  • etc.

Now find your liabilities (the things that you still owe money on).

  • Loans
  • Mortgage
  • Debt (credit cards)


To find your personal equity, begin by finding the dollar amount of all your assets added together. This is your total assets. Next, find the sum of all your liabilities. This is your total liabilities. Subtract your total liabilities from your total assets. The sum will give you your personal equity.

Step 7: Resources and Suggestions

After creating your personal budget, you might find yourself overwhelmed. It can be difficult to make ends meet. Luckily, there are many resources that can provide aid and help lighten your financial load. The next few steps contain resources and suggestions to apply to your personal budget.

Step 8: Government Programs

You might consider looking into government programs to help cover the costs of some of your monthly expenses.

These links are just a starting point to the wide variety of government aid you can use. Additional programs like these can be found on the internet through approved government websites.

Step 9: Increase Your Income

Find ways to increase your income. 

  • A second job - Finding an additional job may help you make ends meet. Even just a few extra hours at another workplace can add greatly to your income.
  • Maximizing your job - You could ask your current employer for additional hours/shifts or ask for more compensation. Employers are usually open to helping out their loyal employees.
  • Side hustles - Side hustles are an increasingly popular means of earning additional income. Ideas vary from providing childcare to taking professional photos to power washing driveways. Think of skills and assets you already have and put them to use.

Step 10: Sell Assets

Consider selling assets to help cover expenses.

This tip should be considered very carefully. There are many pros and cons of selling assets. Be certain that you will be able to use the money gained to catch up on your expenses rather than wasting it. If you do choose to sell an asset, consider one of the following:

  • jewelry
  • electronics
  • vehicles
  • large furniture
  • unused equipment
  • etc. 

Step 11: Avoid Debt

Avoid going into debt.


While this piece of advice seems to be self-explanatory, it is a universal truth in the financial world. It is easier to avoid financial struggles when you are not in debt. 


If you cannot afford something, don't buy it.


Avoid debt. Plain and simple.

Step 12: Coupons

While coupons may seem to be a thing of the past--something you might find in an old newspaper or magazine--coupons remain in effect to this day. Most coupons can be found online through websites or apps. Coupons are offered as a way of promoting a product while selling it at a cheaper price for a limited time. Knowing this, it is easy to see how coupons can cut some of your monthly expenses. Below are some coupon resources that offer a wide variety of deals.

Step 13: Finding Cheaper Rates

The world we live in makes it nearly impossible to go without things such as insurance, phone, or internet. Yet, these are some of the most subjective costs we pay. Luckily, there are resources to find cheaper rates for these necessities.

Step 14: Happy Budgeting!

That's it! Now you are on your way to financial success! We hope that this Instructable was helpful and informative on how to create a simple budget and apply some tips and tricks to your own finances. Being financially responsible is not easy, but it is definitely worth it.

Good luck!