How to Use Budgeting Calculators to Stay on Top of Your Finances

As time changes, money changes too. One way to stay on top of the ever-changing financial states is to utilize a budget. Some people choose to hire and pay someone to budget for them, and others choose to study and create a budget for themselves. Budgeting Calculators are a great place to start.

Evaluating Income

Once, you start to assess your income, it begins to become easier to address spending habits, and the road to saving more opens up. Budgeting every month is a great way to track where your money is going and where you can cut back to save more.

The Street, a personal finance website, encourages households who do not budget to start, just to assess spending habits. This budget-friendly resource is cited saying.

"At that low point you can start taking the action steps needed to rebalance your household budget and save more cash in the long run."

So, even if your spending is high and your savings are low you can use it as a launching pad to begin a healthier routine in your financial lives.

Types of Income

After evaluating your income, you can then see where it is coming from after taxes have been deducted.

Write It All Down

Keeping a budget spreadsheet can be helpful when starting a new project. It's always nice to have everything down on paper (or Google docs) before moving forward, that way you know exactly where your money is going. Creating a budget ahead of time can help you know if you can actually afford the DIY project, and assure you that in doing so you won't have to tap into your savings or put anything on a credit card.

Literally Do It Yourself

Before you dive into any DIY, make sure ahead of time that you can actually do it yourself. Labor can be costly, and usually makes up for most of the costs of a project. Skip the expense of paying someone else, and put the money back into your own pocket by tackling the project yourself. Unless it's electrical, in that case don't hesitate to call an electrician.

  • Net income is your primary source of income.
  • Extra income is side income, such as Uber and Amazon.
  • Earned income is the money that is returned on investing and personal assets.
  • Pension and 401K are retirement savings that are often considered when assessing income.
  • Ancillary income is anything you receive from gifts, lottery and gambling, and child support.

From here, it is easy to address where your money is coming in from and how to best spend and save it.

Addressing Expenses

When you have a net income set, then you can review your committed and revolving payments. Payments like housing, mortgage, and rent. Does that include utilities or not? How does internet, phone, electricity, and water get factored into the monthly picture? These are the first three things you want to get clear and concrete about first.

Next, try to see how much you are going to budget for food and groceries. If you notice when you're reviewing your avenues of income, that you spend a lot out to eat, try to see if you can set a budgeting goal to spend less in the next coming month.

How do you get around? Now, take a fair look at how much you spend on gas and car repairs every month, or calculate rideshare and public transit costs.

Once those get taken care of, factor in credit card debt and any student, housing, or auto loans that need to get paid.

When you have everything budgeted, consider whatever you have left to be used for fun and recreation or to be saved.

50/30/20 Budget

According to Nerd Wallet, one of the most effective ways for starting a budget is to calculate your monthly income into three different categories:

  1. 50% of income - needs: things that cannot be avoided every month, such as housing, transportation, insurance, and childcare.
  2. 30% of income - wants: monthly subscriptions, travel, entertainment, and eating out.
  3. 20% of income - savings/debt: starting and growing an emergency savings account and focusing on large debt.

By assessing, reviewing, and organizing your income into these different categories you can easily begin to better your financial health.

Budgeting is a skill that can be a crucial help in the lives of many people. Learning to calculate your income and expenses and creating and sticking to a monthly budget can do a world of wonders for those struggling under financial burdens. Lessen the load with a good, clear look at your expenses and income.