How to Figure a Monthly Budget

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Having a budget helps you to plan for your expenses that you will have so you can make sure you have enough money. The budget keeps you accountable for the amounts you spend and can help you see where you are spending your money. To figure your budget, you need to know how much money you bring in each month.

Add you income sources to calculate your monthly income. If you only have one source of income, this might be quite simple. If you are an employee, use your post-tax withholding income and skip to step 3. If you are self-employed or do not have taxes withheld from your income, you will have to account for taxes.

Estimate your taxes if you do not have money withheld from your paycheck. If you expect your earnings to be about the same as the prior year, you can use the prior year's taxes divided by 12 to figure out your monthly taxes. For example, if you paid $6,000 in taxes the prior year, you would divide 6,000 by 12 to find you would need to budget $500 per month for taxes.

Calculate your after-tax pay by subtracting your estimated taxes, either from your tax withholding or from your estimated taxes. For example, if you earned $3,600 per month and your estimated taxes were $500, you would have $3,100 in after-tax pay.

Outline your necessity categories such as food, shelter, transportation, household expenses, savings, donations and debt payments. Household expenses generally consist of cell phone costs, internet, cable, energy and other expenses.

Set a percentage for each of your necessity categories. For example, CNBC recommends that you spend about 30 percent of your income on housing, 18 percent on transportation, 10 percent on debt payments, 14 percent on food, 7 percent on household expenses, 10 percent on savings and 11 percent on everything else such as entertainment. These percentages can vary from person to person and family to family. For example, if you are single, you would likely spend a smaller amount on food than a family with three kids.

Multiply the percentage for each category by your after-tax income. For example, if you had an after-tax income of $3,100 and budgeted 30 percent for housing, you would budget for $930. Repeat this for each category to figure your monthly budget.


  • Keep track of your spending each month. If you notice you are consistently going over budget in a certain category, determine whether there is a way you can cut back, such as eating in more often if you are going over in the food category, or if you need to make adjustments in another area, such as if you mortgage payment exceeds your housing budget.

    Using a budget worksheet can help you manage your budget.