A monthly budget plan is the overview of what funds come into your account and then what funds exit the account. Balancing your budget helps to lower and eliminate debt.
Budgets help people track and manage their money by showing outflow and inflow. Budgets can show where you are spending too much money and areas where you can make cutbacks.
A budget can be as simple as writing all expenses and income on a sheet of paper or as complicated as a spreadsheet with charts and graphs. The complexity is not important, as long as the budget serves your particular needs.
A budget can go as far as a year in advance in an attempt to plan for future expenses, reduce debt or control expenses. Most budgets, however, are created on a month-to-month basis to help people manage outflow and inflow.
Break down each expense into categories, such as dining, entertainment, clothing, groceries, insurance and auto expenses. Categorize each form of income as well.
A monthly budget should be analyzed and areas of reduction should be considered in an effort to pay down additional debt or increase savings. Additionally, note any significant changes from month to month to see if there are any new areas of spending.
- Federal Trade Commission. "Making a Budget - What It Is." Accessed June 6, 2020.
- Consumer Financial Protection Bureau. "Financial Terms Glossary - Fixed Expenses." Accessed June 6, 2020.
- Consumer Financial Protection Bureau. "Financial Terms Glossary - Variable Expenses." Accessed June 6, 2020.
Lynn Lauren has been a professional writer since 1999, focusing on the areas of weddings, professional profiles and the banking industry. She has been published in several local magazines including "Elegant Island Weddings." Lauren has a Master of Business Administration and a Bachelor of Business Administration, both with marketing concentrations from Georgia Southern University and Mercer University, respectively.