Budgeting

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.

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.

Most Popular

5 Beaten-Down Stocks to Buy on the Dip
stocks to buy

5 Beaten-Down Stocks to Buy on the Dip

The market has delivered some nauseating volatility of late. The good news? That has teed up a few great stocks to buy at a discount.
September 27, 2021
10 Best Stocks for Rising Interest Rates
stocks

10 Best Stocks for Rising Interest Rates

The 10-year Treasury yield is hovering near its highest level in months. Here are 10 of the best stocks to buy in a rising interest-rate environment.
September 30, 2021
13 States That Tax Social Security Benefits
social security

13 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in these 13 states, your Social Security benefits are subject to a state tax. That's on…
October 4, 2021

Recommended

The 25 Cheapest U.S. Cities to Live In
places to live

The 25 Cheapest U.S. Cities to Live In

Take a look at our list of American cities with the lowest costs of living. Is one of the cheapest cities in the U.S. right for you?
October 13, 2021
4 Ways to Earn More From Your Rainy Day Fund
savings

4 Ways to Earn More From Your Rainy Day Fund

You should set aside enough money to cover three to six months of living expenses in case of an emergency. But sticking this cash in a savings account…
October 12, 2021
11 Best Things to Keep in a Safe Deposit Box
savings

11 Best Things to Keep in a Safe Deposit Box

These valuables and documents, along with some items you hold dear, should be stored securely at your bank.
September 25, 2021
9 Things You’ll Regret Keeping in a Safe Deposit Box
savings

9 Things You’ll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
September 24, 2021