Office of Financial Empowerment
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Create a Budget

 
Have you ever wondered, "Where did my money go?"
A good way to understand how you spend your money is to develop a budget for your household (includes you, your partner and children).  Adding and subtracting is all the math you'll need.  Here's how you can create a budget in three easy steps:



Step 1:  Calculate your monthly household income.
Monthly income includes:
  • What's left of your paycheck AFTER taxes and deductions.  Deductions may include insurance and retirement plan contributions, among other things.
  • Cash benefits from Social Security payments, temporary assistance for needy families (TANF), and other public assistance programs.
  • Additional earnings from alimony payments, a part-time job, or other income sources.

Step 2: Calculate your monthly household expenses.

  • An easy way to track expenses without trying to remember what you bought or locating last month's receipts is to keep a spending journal.  In the journal, write down every purchase you make or bill you pay for one month.  At the end of the month, calculate the total amount you spent.  You should organize your spending into two categories:
    • Fixed expenses (expenses that you must pay each month), such as rent, car payments, heat, etc.
    • Flexible expenses (expenses that change month to month), such as entertainment, clothing, food, etc.

Step 3: Subtract total expenses from total income.

  • If you have money left over, consider saving it in a bank account
  • If your expenses are greater than your income, you'll need to determine how you can reduce expenses or increase income. 
  • If you're in debt and can't seem to solve the problem, speak with a Financial Empowerment Center counselor to get free one-on-one financial counseling in English and Spanish.


 Download OFE's Budget Worksheet to get started on creating
    your very own budget today!
 Want to see how it's done? See how Alberto & Fatima's budget helps them save money.