Setting up the budget

Now that you have though about your sources of income and how you spend your money, now let's put that information into a rough looking budget.  This will be your building block for a more precise budget in the very near future.  Here is what you need to do:

1. Find your notes regarding how much you make on a monthly basis and create an income category.
2. Find your notes regarding how much you spend on a monthly basis and create expense categories that fit your needs and that would cover all of your expenses.  Some categories that you may want to create would be:  Mortgage/Rent, Utilities, Car Insurance, Car Payment, Credit Card Payment, Groceries, Out-to-Eat, Fuel for your car, Daycare, etc.
3. Put in the amounts for your income and your expenses.  Now subtract your expenses from your income.  Is the number positive or negative?  Hopefully it is positive, but if it isn't, don't worry, you just have to be extra creative to make that happen.  Even if you have a positive number, be creative to get to where you want the bottom line to be, within reason of course. This is where the art of budgeting comes in.

I have posted a template that you can use for this process.  The template is located under the templates tab.  Copy and paste the link in your browser and it will open up in Microsoft Excel.