Creating a Budget with a Personal Budget Spreadsheet

Creating a budget · Step 1: Note your net income · Step 2: Track your spending · Step 3: Set your goals · Step 4: Make a plan · Step 5: Adjust your habits if ... BankofAmericaCoronavirusResourceCenterSeedetailsClose'lastpagevisited'modalWelcomeback.Here'swhereyouleftoff.Showrelatedcontent(Don'tshowmethispop-upofthepageIleftoffonagain)Youmightalsobeinterestedin:SkiptomaincontentSignInLocationsContactHelpEnespañolMyPrioritiesSearchMenuAlltopicsCreditDebtSaving&BudgetingHomeownershipAutoRetirementCollegePrivacy&SecurityPersonalBankingTaxes&IncomeOtherMilitaryMillennialReportAllSpotlightsLifePrioritiesMyPrioritiesEducationResourceCenterLocationsContactHelpEnespañolCreditInthistopicChoosingaCreditCardCreditReportCreditScoreHowCreditCardsWorkManagingCreditCardsTrendingBuildingcreditandkeepingyourshealthyHowtobuildcreditfromscratchBuildingyourcreditwithasecuredcreditcardDebtInthistopicDebt&FinancialAssistancePayingOffDebtUnderstandingDebtTrendingUnderstandingbalancetransfersHowtotacklefinancialstressNegotiatingwithcreditorsSaving&BudgetingInthistopicBudgetingTipsEmergencySavingsFamily&MoneySavingStrategiesSmarterSpendingTravel&EntertainmentTrendingCreatingabudget5stepstogetstartedwithsavingHowtosavemoneyeverydayHomeownershipInthistopicHomeEquityMortgageBasicsMortgageProcessMovingPreparingtoBuyaHomeRefinancingRentingTrendingBuyingahomecomfortablyandaffordably10questionsyoushouldaskmortgagelendersIsahomeequitylineofcreditrightforme?AutoInthistopicAutoLoanTipsBuyingaCarTrendingBuyingvs.leasingacarComparingthecostofnewandusedcarsThetruecostofacarRetirementInthistopicBuildingWealthLivinginRetirementNearingRetirementStartingOutTrendingYour401(k):10thingstofindoutTheeffectoftimeonyourretirementaccountBuildingafoundationforretirementCollegeInthistopicBeforeCollegeNearingCollegePayingBackStudentLoansTrendingTermstoknowwhenyoutakeoutstudentloansEstimatingyourchild'scostofcollege4commonquestionsaboutsavingandinvestingforcollegePrivacy&SecurityInthistopicIdentityTheftProtectingPrivacy/SecurityTrendingHowlongshouldyoukeepimportantdocuments?Victimsofidentitytheft:5stepstotakeactionWhattodoifyouloseyourwalletPersonalBankingInthistopicHowBanksWorkManagingBankAccountsTeachingKidsAboutMoneyTrending8tipsforgettingthemostoutofyourcheckingaccount6stepstohelpamiddleorhighschoolerbudgetHowteensmanagetheirmoney:WhatparentsneedtoknowTaxes&IncomeInthistopicPlanningPrep&FilingWorkPay&BenefitsTrendingDecodingyourtaxbracketBeyondsalary:Benefitsmaymattermorethanyouthink6stepsforfirst-timetaxfilersCreditDebtSaving&BudgetingHomeownershipAutoRetirementCollegePrivacy&SecurityPersonalBankingTaxes&IncomeSaving&BudgetingCreatingabudgetShareCloseshareSaveClosesaveAddedtoMyPrioritiesPrintWhetheryou’relookingtocreateapersonalbudgetspreadsheetorjustgetabettergrasponmoneymanagement,startwiththesesixsteps.Evenifyoudon’tuseabudgetspreadsheet,youprobablyneedsomewayofdeterminingwhereyourmoneyisgoingeachmonth.Creatingabudgetwithatemplatecanhelpyoufeelmoreincontrolofyourfinancesandletyousavemoneyforyourgoals.Thetrickistofigureoutawaytotrackyourfinancesthatworksforyou.Thefollowingstepscanhelpyoucreateabudget.Step1:NoteyournetincomeThefirststepincreatingabudgetistoidentifytheamountofmoneyyouhavecomingin.Keepinmind,however,thatit’seasytooverestimatewhatyoucanaffordifyouthinkofyourtotalsalaryaswhatyouhavetospend.RemembertosubtractyourdeductionsforSocialSecurity,taxes,401(k)andflexiblespendingaccountallocationswhencreatingabudgetworksheet.Yourfinaltake-homepayiscallednetincome,andthatisthenumberyoushouldusewhencreatingabudget.Ifyouworkfreelanceorpart-time,we’veputtogethersometipsformanagingirregularincome.Tip:Ifyouhaveahobbyoratalent,youmaybeabletofindawaytosupplementyourincome.Havinganextrasourceofincome canalsobehelpfulifyoueverloseyourjob.Step2:TrackyourspendingIt’shelpfultokeeptrackofandcategorizeyourspendingsoyouknowwhereyoucanmakeadjustments.Doingsowillhelpyouidentifywhatyouarespendingthemostmoneyonandwhereitmightbeeasiesttocutback.Beginbylistingallyourfixedexpenses.Theseareregularmonthlybillssuchasrentormortgage,utilitiesorcarpayments.It’sunlikelyyou’llbeabletocutbackonthese,butknowinghowmuchofyourmonthlyincometheytakeupcanbehelpful.Nextlistallyourvariableexpenses—thosethatmaychangefrommonthtomonthsuchasgroceries,gasandentertainment.Thisisanareawhereyoumightfindopportunitiestocutback.Creditcardandbankstatementsareagoodplacetostartsincetheyoftenitemizeorcategorizeyourmonthlyexpenditures.Tip:Recordyourdailyspendingwithanythingthat’shandy—apenandpaper,anapporyoursmartphone.YoucanusethisspendingandbudgetingtoolifyouhaveanaccountwithBankofAmerica.Step3:SetyourgoalsBeforeyoustartsiftingthroughtheinformationyou’vetracked,makealistofallthefinancialgoalsyouwanttoaccomplishintheshort-andlong-term.Short-termgoalsshouldtakenolongerthanayeartoachieve.Long-termgoals,suchassavingforretirementoryourchild’seducation,maytakeyearstoreach.Remember,yourgoalsdon’thavetobesetinstone,butidentifyingyourprioritiesbeforeyoustartplanningabudgetwillhelp.Forexample,itmaybeeasiertocutspendingifyouknowyourshort-termgoalistoreducecreditcarddebt.Step4:MakeaplanUsethevariableandfixedexpensesyoucompiledtohelpyougetasenseofwhatyou’llspendinthecomingmonths.Withyourfixedexpenses,youcanpredictfairlyaccuratelyhowmuchyou’llhavetobudgetfor.Useyourpastspendinghabitsasaguidewhentryingtopredictyourvariableexpenses.Youmightchoosetobreakdownyourexpensesevenfurther,betweenthingsyouneedtohaveandthingsyouwanttohave.Forinstance,ifyoudrivetoworkeveryday,gasolineprobablycountsasaneed.Amonthlymusicsubscription,however,maycountasawant.Thisdifferencebecomesimportantwhenit’stimetomakeadjustments.Step5:AdjustyourhabitsifnecessaryOnceyou’vedoneallthis,youhavewhatyouneedtocompleteyourbudget.Havingdocumentedyourincomeandspending,youcanstarttoseewhereyouhavemoneyleftoverorwhereyoucancutbacksothatyouhavemoneytoputtowardyourgoals.Want-to-haveexpensesarethefirstareatolookforspendingcuts.Canyouskipmovienightinfavorofamovieathome?Tryadjustingthenumbersyou’vetrackedtoseehowmuchmoneythatfreesup.Ifyou’vealreadyadjustedyourspendingonwants,evaluateyourspending onneeds.Youmayneedinternetathome,butdoyouneedthefastestavailable?Lastly,ifthenumbersstillaren’taddingup,youcanlookatadjustingyourfixedexpenses.Doingsowillbemuchmoredifficultandrequiregreaterdiscipline,butoncloseinspectiona“need”mayjustbea“hardtopartwith.”Suchdecisionscomewithbigtrade-offs,somakesureyoucarefullyweighyouroptions.Tip: Smallsavings canadduptoalotofmoney,sodon’toverlookthelittlestuff.Youmightbesurprisedathowmuchextramoneyyouaccumulatebymakingoneminoradjustmentatatime.Step6:KeepcheckinginIt’simportantthatyoureviewyourbudgetonaregularbasistobesureyouarestayingontrack.Youcanalsocompareyourmonthlyexpenses tothoseofpeoplesimilartoyou.Fewelementsofyourbudgetaresetinstone:Youmaygetaraise,yourexpensesmayincreaseoryoumayhavereachedyourgoalandwanttoplanforanewone.Whateverthereason,keepcheckinginwithyourbudgetfollowingthestepsabove.DisclaimerCloseDisclaimerThematerialprovidedonthiswebsiteisforinformationaluseonlyandisnotintendedforfinancial,taxorinvestmentadvice.BankofAmericaand/oritsaffiliates,andKhanAcademy,assumenoliabilityforanylossordamageresultingfromone’srelianceonthematerialprovided.Pleasealsonotethatsuchmaterialisnotupdatedregularlyandthatsomeoftheinformationmaynotthereforebecurrent.Consultwithyourownfinancialprofessionalandtaxadvisorwhenmakingdecisionsregardingyourfinancialsituation.UpNextGenZ:KnowyourmoneyMorefromBankofAmericaCreateapersonalizedbudgetinonlineormobilebankingAnalyzeyourspendingContactUsWe'reheretohelp.ReachoutbyvisitingourContactpageorscheduleanappointmenttoday.ScheduleanappointmentMobileBankingrequiresthatyoudownloadtheMobileBankingappandisonlyavailableforselectmobiledevices.Messageanddataratesmayapply.AdvertisingPracticesWestrivetoprovideyouwithinformationaboutproductsandservicesyoumightfindinterestinganduseful.Relationship-basedadsandonlinebehavioraladvertisinghelpusdothat.Here'showitworks:Wegatherinformationaboutyouronlineactivities,suchasthesearchesyouconductonourSitesandthepagesyouvisit.ThisinformationmaybeusedtodeliveradvertisingonourSitesandoffline(forexample,byphone,emailanddirectmail)that'scustomizedtomeetspecificinterestsyoumayhave.Ifyoupreferthatwedonotusethisinformation,youmay optoutofonlinebehavioraladvertising.Ifyouoptout,though,youmaystillreceivegenericadvertising.Inaddition,financialadvisors/ClientManagersmaycontinuetouseinformationcollectedonlinetoprovideproductandserviceinformationinaccordancewithaccountagreements.Also,ifyouoptoutofonlinebehavioraladvertising,youmaystillseeadswhenyousignintoyouraccount,forexamplethroughOnlineBankingorMyMerrill.Theseadsarebasedonyourspecificaccountrelationshipswithus.Tolearnmoreaboutrelationship-basedads,onlinebehavioraladvertisingandourprivacypractices,pleasereviewthe BankofAmericaOnlinePrivacyNotice andour OnlinePrivacyFAQs.ContinueCancelContinueCancelConnectwithusBankofAmericaPrivacySecurityCareersSitemapAdvertisingPracticesEducationResourceCenterTermsofUseNotallcontentisavailableinSpanish.BankofAmerica,N.A.MemberFDIC.EqualHousingLender©2019BankofAmericaCorporation.Allrightsreserved.