Why Create a
Budget?
A budget compares your income
the money that comes in, to your expenses
the money that goes out. This is called cash flow. A budget helps
you keep track of your money so you avoid spending more money than
you have. It is one of the best tools to help you save money.
Demonstration
Once you have
all your figures
ready, using a
calculator can
help you create
a budget quickly.
Take a moment
to watch how easy
it is to create
a budget using
a Cash Flow calculator.
Click the image
to begin an animated demonstration of the calculator.
Types of Expenses
Knowing the two types of expenses can help you recognize ways to
eliminate those you don't need and keep the savings to buy a home.
Click the links to learn more about each.
Practice
Now
you’ll have
a chance to use
the Cash Flow
calculator to
figure your cash
flow. Read all
the steps before
you begin. After
you finish, you
can print your
cash flow report
and keep it as
your budget.
Directions
- Gather your income and expense figures. If you do not know these figures, you can estimate them.
Saving your receipts for a few months can help you estimate.
- Click the Cash
Flow link. A window will open with the calculator
you saw in the demonstration.
- Enter your figures into the calculator as you saw in the demonstration and print the report. Note: You can
use this report as your budget by comparing your actual income and expenses to it. This will show you how well you are staying within your budget.
- Click Download
Worksheet. This is another budget that you can print using the File menu or the Print button.
- If you prefer to save the worksheet, right-click the link above.
- Select Save Target As, and type a folder location on your computer to store the worksheet.
- Using the worksheet, enter your income (or cash inflow) and your expenses (or cash outflow).
- Then each month:
- Enter the amount you spent in the actual column for each category.
- Compare it to the amount you budgeted to see how well you are doing.
- Subtract your total expenses from your total income. This is your net income.
- Determine which amount is higher-your expenses or your income? If your expenses are more than your income, it's time to take a closer look at your expenses.
- Consider which of the expenses in your worksheet are wants and not needs.
- Eliminate some of the want expenses like dining out and gifts.
- Then, see the difference this makes in your cash flow.
- Click the Close Window link to return to the course.
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Did you know you could negotiate the payment amount of all your debts
(credit cards, car loans etc.)?
There are non-profit organizations
that can help
you to re-structure
your debt into
one payment. Always
consult with your
tax advisor first,
if this applies
to you.
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