A Personal Budget in 5 Easy Steps
According to a survey by the Ohio Credit Union League , 20% of Ohioans are unsure how to create a monthly budget. While some effort is necessary, garnering a better understanding of your cash flow is an important step to strengthening your family’s financial situation. We suggest the following steps to establish a basic budget: Step One: Keep track of your income and expenses for a couple of months . You need an idea of what a “typical” month is like for you. For cash expenditures, keep receipts in an envelope you carry with you every day. Then go back to categorize and total the receipts at the end of the month. Step Two: Lay out your budget. In the “expenses” part of your budget, you will be accounting for two major types of expenses: fixed and variable. Fixed expenses are set amounts you pay every month, such as rent, car payment, and utilities. Variable expenses include discretionary items, such as entertainment and clothing. Write down all the necessities so yo