Creating a budget is important to ensure your financial security, monitor your income and expenses, and a way to help you save money. In order for your budget to be successful and reliable, you MUST provide as much detailed information as possible. Ultimately, the end result will be able to show where your money is coming from, how much is there and where it is all going. There are 7 simple steps. Here’s how…

STEP 1 1. Collect all your financial statements you can find: Bank statements, Investment accounts, Recent utility bills and Any information regarding a source of income or expense. The point is that you will create a monthly average with all the information you collect.

STEP 2 2. Write down all of your sources of income. Self-employed income Have any outside sources of income (alimony, child support, cash assistance, settlement payments) be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted using the net income, or take home pay, amount will be a more accurate reflection of your income. Record this total income as a monthly amount.

STEP 3 3. Create a list of monthly expenses. Write down a list of all the expected expenses you have over the course of a month. This includes: mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, retirement or college savings and anything else you spend money on.

STEP 4 4. Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. Such as your mortgage or rent, car payments, cable and/or internet service, trash pickup, credit card payments and so on. These expenses for the most part are essential yet not likely to change in the budget. Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out and gifts to name a few. This category will be important when making adjustments.

STEP 5 5. Total your monthly income and monthly expenses. If the information you have gathered and calculated reflects more income than expenses this is a great thing. This means you can use this extra money in areas of your budget such as retirement savings or paying more on credit cards to eliminate debt faster. If you are showing a higher expense column than income it means some changes will have to be made.

STEP 6 6. Make adjustments to expenses. If you have accurately identified and listed all of your expenses the goal is to have your income and expense columns equal. This means all of your income is accounted for and budgeted for a specific expense. If your expenses are higher than your income you should look at your variable expenses to find areas to cut. Since these expenses vary, it is easier to reduce how much money you spend on those items, which will bring you closer to your income. *Tip: When trying to reduce your monthly expenses focus on items that you do not NEED to survive.

STEP 7 7. Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.

HOW MUCH SHOULD YOU SPEND PER MONTH? CATEGORY% OF TAKE HOME PAY Housing30% Utilities7% Food12% Medical5% Clothing7% Transportation17% Recreation4% Insurance5% School/Child Care3% Savings8% Spending Money2%

Example Expense = decimal of take home pay x 100  this will give you the Income % of take home pay spent on that expense. For example if you spend $ on Housing (rent) and your monthly income is $ you would input the following information: 400 = x 100 =33%  this means you are over your 1200 budgeted amount for housing expenses of 30%.

SIMPLE STEPS TO SAVE MONEY 1. Set specific financial goals, then decide how much you need to save each week to get there. 2. Start a savings account and have a portion of your paycheck directly deposited 3. If you pay off a loan, continue making the payments to yourself into a savings account 4. Save your change and any gifts of cash 5. Pay your bills on time to avoid late payment fees. 6. Use store coupons and store frequent buyer cards.