You can’t learn to budget for your monthly expenses unless you know what you are budgeting for. Everyone is slightly different when it comes to expenses, and if your utilities are paid, then that is a few less items you will need to count into your over-all monthly expenses.
But even with the slight differences in monthly expenses, the idea will hold true when used in just about every circumstance.
Below you will find an example that is modeled after my own monthly expenses. You can substitute your own expenses for mine where needed. (Dollar amounts will probably vary as well.)
- Rent [ $600 ]
- Electric [ $150 ]
- Groceries [ $200 ]
- Internet [ $70 ]
The above 4 things are the top priorities on the list. The dollar amount have been put at “worst case scenario”. Internet is not $70 a month. Groceries may not be $200 a month. But when you budget for more than will actually be needed, you wind up with more money than you thought you would have.
To find out your cash left over after the necessary items have been taken care of, all you have to do is take your gross amount (minus an acceptable amount for tax, which you should have a fair idea of after your first pay check) and subtract the total amount of the necessary items from that total amount taken from your income.
Since I live with my partner, and we both make the same amount, I will be adding her income with mine to figure out the gross amount.
- $8 /hour x 40/week x 4 weeks
- Gross amount = $2560
- Gross amount - taxes ($50 /paycheck, or $200 /month) = $2160
- Gross amount - taxes rounded down for “just in case” scenario = $2000
- Gross amount final figure of $2000 - necessary items = $1020
- Left over amount = $780
To get an even better understanding of how this final left over amount will play into a monthly grid, you must take the total leftover amount and divide it by how many paychecks you receive per month. For us, it would be 8.
- Left over amount = $780 / 8 = $97.50 (for each person)
That leave us with just a little under $100/week to spend on whatever we want, or a combined total of a little under $200.
If you are just starting a job, the budgeting game will have to wait until a month has passed. You can’t accurately assess your bill situation if you don’t have any bills.
Once you have your left over amount, you can figure in what can be spent on entertainment and other activities that are necessary to your survival. ((Internet isn’t necessary to survive. Unless you’re us.)) Since we have enough left over, we do not figure in gas. Even if I did factor in gas and cigarettes, the end result would only be minus $200, which can be equalized with a simple solution: 1 week will not have money for recreation while the remaining 3 will.
What do we do with the remaining funds? Deposit them into our bank account for use on things such as recreation, gas, cigarettes, alcohol, and other things, such as the hosting bill for this website ((which is also paid for in part and sometimes in whole by the funds made from Payperpost)).
Budgeting doesn’t have to be a nightmare - it is actually quite simple.