Q:

How do you create a budget plan?

A:

Quick Answer

Create a budget plan by first determining your expenses and sources and amount of income on a selected basis, such as weekly, monthly or annually. Collect your bills and pay stubs to help you determine amounts, and do not forget to include other income sources besides your job.

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Full Answer

In addition to job income, other sources of income may include child support or scholarships. If you do not earn money on a regular basis, then plan your income by checking your year-long income from the previous year and divide that by 12, but only if you think your income is staying the same for the current year.

Divide your expenses into critical expenses, such as monthly rent or utility bills, and discretionary items, such as entertainment. Expenses can also include credit card bills, food and gas, clothes, school supplies and car repairs.

When you have both income and expenses, subtract the latter from the former to see how much money you have left over. A zero or negative amount signals that you are spending too much money. If this is the case, then subtract your fixed and critical expenses to view what is left over, and then either cut back on discretionary expenses or find other sources of income.

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