Many people are on a budget, but it isn't always easy to know how much you can spend and still stay on your budget. If you have a monthly spending allowance, you might risk running out of money half way through the month. If you have a daily spending allowance instead, you will know everyday how much money you have to spend without having to cut into your savings.
Calculate your monthly income by multiplying your weekly pay, after taxes, by 4.28 on your calculator (bi-weekly pay is multiplied by 2.14). For example, a weekly pay of $950 equals a monthly pay of $4,066.
Add all of your monthly bills, including your rent or mortgage, utilities, cable and Internet, cellular phones, home phone, car payment, car insurance, credit card bills, college tuition, daycare and any subscriptions or other monthly bills.
Calculate your monthly grocery expenses by adding last month's grocery bills. Be sure to include all large grocery trips, small grocery trips and convenience store trips. According to the USDA in 2014, if you are a family of four, you and your spouse are between the ages of 19 and 50 and your children are between ages six and 11, you are on a liberal food plan if you spend $1293.20 per month on food; you are on a moderate-cost plan if you spend $1064.60 per month on food; you are on a low-cost plan if you spend $854.60 per month on food and you are on a thrifty plan if you spend $650.50 per month on food.
Calculate your gas expense by adding up all gas purchases from last month's bank statement.
Subtract your monthly bills, monthly grocery expenses and gas expenses from your monthly income to figure your savings and spending money. For example, if your monthly bills are $2,200, your grocery bill is $766, your gas expense is $100 and your income is $4,066, then you have $1,000 remaining each month for spending and saving.
Subtract your desired monthly savings from your total after expenses have been subtracted to determine your monthly spending money. For example, if you have $1,000 remaining and you wish to save $300, the remaining balance would be $700.
Divide your monthly spending money by 30 to figure your daily spending allowance. For example, if you have $700 in monthly spending money ($700/30=$23.33), you will have $23.33 to spend each day.
Tips
If you are on a liberal food plan, your food budget is high. You can buy generic brands, use coupons and eliminate convenience store trips to save money on your food costs.
If you want to change your spending habits, track your spending using a computer program, such as Excel, or by hand in a notebook. It is easier to change your habits when you keep a journal of your spending.
Warnings
Be sure to include all bills and expenses in your calculations. If you mistakenly leave out a bill or expense, you will overstate how much money you can spend each day.
If your income varies, account for that. It is better to understate your income than to overstate it. If you make a different amount of money each pay period, use your lowest earnings in your calculations. It is better to have money left over than to not have enough money.
Tips
- If you are on a liberal food plan, your food budget is high. You can buy generic brands, use coupons and eliminate convenience store trips to save money on your food costs.
- If you want to change your spending habits, track your spending using a computer program, such as Excel, or by hand in a notebook. It is easier to change your habits when you keep a journal of your spending.
Warnings
- Be sure to include all bills and expenses in your calculations. If you mistakenly leave out a bill or expense, you will overstate how much money you can spend each day.
- If your income varies, account for that. It is better to understate your income than to overstate it. If you make a different amount of money each pay period, use your lowest earnings in your calculations. It is better to have money left over than to not have enough money.
Writer Bio
E.M. Rawes is a professional writer specializing in business, finance, mathematical and social sciences topics. She completed her studies at the University of Maryland, where she earned her Bachelor of Science. During her time working in workforce management and as a financial analyst, she reinforced her business and financial know-how.