Build Your Budget
Think of your budget as a means of setting and reaching your goals.
Think of your budget as a planning device, a means of setting and reaching your goals. You project future expenditures (including savings), record them when they're made, and see whether your projections were any good. If they aren't, you adjust your planning or your spending, whichever is out of line.
Use the household budget worksheet to enter a month's expenditures; we do the addition and subtraction for you. You can even work a couple of months ahead at first, until you get the hang of it. Then you can budget further ahead. After a while you'll want to apply the same principles to long-term goal setting by forecasting the growth of your net worth and all the little pieces that compose it.
Fixed spending
Some of your projections will be easy: You know what your mortgage or rent payments will be in the months ahead. Same for car payments and the premiums coming due on insurance policies. So why budget for them? Because by recording these and other fixed expenditures as monthly outgo, you can see at a glance how much of your income is committed to current or future expenses. That should stop you from spending it on something else.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Variable spending
Here you'll keep track of the items over which you have some degree of control. This section is the place to test your cost-cutting skills. Watch for patterns that may signal trouble. If the "miscellaneous" line keeps growing bigger, for instance, your recordkeeping may be careless.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
The Most Tax-Friendly State for Retirement in 2025: Here It Is
Retirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D Premiums
In 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
Big Changes Are Ahead for Higher Ed
The Kiplinger Letter A major reform of higher ed is underway. Colleges are bracing for abrupt change, financial headwinds and uncertainty.
-
What New Tariffs Mean for Car Shoppers
The Kiplinger Letter Car deals are growing scarcer. Meanwhile, tax credits for EVs are on the way out, but tax breaks for car loans are coming.
-
AI’s Rapid Rise Sparks New Cyber Threats
The Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Blue Collar Workers Add AI to Their Toolboxes
The Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
-
AI Goes To School
The Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
What Does Medicare Not Cover? Eight Things You Should Know
Healthy Living on a Budget Medicare Part A and Part B leave gaps in your healthcare coverage. But Medicare Advantage has problems, too.
-
What To Know if You’re in the Market for a New Car This Year
The Kiplinger Letter Buying a new car will get a little easier, but don’t expect many deals.
-
Will Lower Mortgage Rates Bring Relief to the Housing Market?
The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.