Trying to find a way to put a budget on paper.?

Question

I'm a new wife and soon to be new mother and pretty much my only responsibility in the house is to pay the bills every month. every month i sit down and want to make a budget but i dont know the best way to do it.
its easy to make a colum of the expenses you have but when the amount of them changes every month i dont know how much to allow for each of them (i.e. phone bill goes up with overages, or utilities are higher in the extreme hot or cold months). so i dont have a question really i just thought someone out there might share what their system is for paying bills every month.
i thought maybe i could budget certain bills for a certain amount and then put how much we actually paid for them in another colum? i dont know! it drives me nuts! help!

Answer 1

Congratulations on the baby - I'm due in about 6 weeks (give or take...hopefully less!) ;-)

I do what is called 'reverse' budgeting. I figure out the debts I need to pay every month - car note, insurance, mortgage, etc. The gas, electric, phone, etc - I average out. I then take the total income, and subtract the amount that is debts/recurring payments. The amount left is the amount I live on - entertainment, clothing - all the 'non-essential' stuff.

We are trying to pay down our debts - so we also include an extra amount in our debt total that is applied to our outstanding debts. At the rate we are going, we'll be debt free in 8.5 years. That's with a mortgage, 2 cars, and a few pre-marriage debts.

I can however - recommend Dave Ramsey's Financial Peace book though - he gets into budgeting REALLY really well - and overall it is an impressive book.

Answer 2

I do a zero dollar budget. Every dollar gets a name and a mission. I project high. If I know the phone bill is between 50 to 60 bucks then I will budget for 60. Same with other utilities. Same with food and everything else. Then at the end of the month I go back into the budget and put in the actual costs. The extra money goes toward a bill or into savings or something. Adding that to my budget and I'm back to zero.

Give this page a read. http://www.daveramsey.com/the_truth_about/budgeting_3457.html.cfm There aslo some budgeting forms on this site that I use as examples.

Answer 3

What I do to create a budget is find the average of what I spend on each thing a month, cable (constant), utilities (average), phone, car payment and groceries. Then you add all those columns up and see what it totals. Find the difference between the how much money you need and have. I normally then take a certain percentage of what's left and throw it in savings and the other part is left for misc. costs which could be overcharges on a phone bill. Really though the point of the budget is to tell yourself this is how much you allotted for a specific thing and you won't go over that amount. I also use money 2005 with my checking account and it helps show how much I'm spending on everything.

Answer 4

The best way is to use a spreadsheet program (like Excel) or set up a spreadsheeet on paper.

You're right that the best approach is to list your budgeted amounts on the left and allow several columns to the right of that to list each month's actual expenses. This allows you to see if you are over or under budget and by how much. It is sometimes helpful to show two columns for each month -- one to show your actual and the next to show your variance from budget. In other words, if you budget $100 a month for your electric bill and the bill is $120, you would show the $120 and next to it ($20) to show that you were $20 over budget. Adding up the variance column will give you the total amount that your are (over)/under budget for the month.

For utility bills that fluctuate a lot between winter and summer, it can be very helpful to sign up for a level pay plan. Most utilities offer this, and it allows you to pay the same amount every month, regardless of what your actual bill is. The company will average out a year's worth of bills to calculate your level pay amount. Your bill will show how much you owe based on your usage, but you will pay the level pay amount. The utility will review the level pay amount periodically to make sure it is still in line with your usage.

Answer 5

you could get on budget billing with some of your utilities. they average out your bills and you pay the same every month

Answer 6

Assuming you have access to Microsoft Excel, Microsoft has several free budget spreadsheets available at their website.