You didn't write whether this is a personal budget or a corporate budget. I handle a corporate budget differently than a personal budget. (I'm an accountant and I've done hundreds of budgets.). I will assume that you are asking about a personal budget.
The foundation of any budget is good bookkeeping. You need to track your income and your expenses. Set up a budgeting worksheet on Excel, or get Quicken. Quicken will be easier to work with, but it will cost about $60. If you use Excel, then each column in Excel should be one month. Each row should be 1 expense category. Make sure to reconcile your checkbook each month. Failing to reconcile your checkbook is like having a condom, but not using it.
There are some items which are a bit harder to budget. For example, you pay for homeowner's or renter's insurance once a year. Take the bill divide it by 12, and add it to your expenses monthly as an accrued item. Some expenses are unpredictable. For example, you know that your car will eventually need an expensive repair, but you don't know when it will happen. Go through your check register for the last 24 months. Add up all the unexpected items and divide by 24. Then enter that amount on your budget each month.
I suggest you get a book called Bookkeeping for Dummies by Lita Epstein. Please don't be offended by the name. For Dummies is a publishing company. They contract with top authors who are both experts in their field and have the ability to put concepts in simple English.
I listed the categories to start below. Add or delete categories as needed.
INCOME:
Wages and Bonuses
Interest Income
Investment Income
Miscellaneous Income
Income Subtotal
INCOME TAXES WITHHELD:
Federal Income Tax
State and Local Income Tax
Social Security/Medicare Tax
Income Taxes Subtotal
Spendable Income
EXPENSES:
HOME:
Mortgage or Rent
Homeowners/Renters Insurance (actual amount paid)
Property Taxes (actual amount paid)
Home Repairs/Maintenance/HOA Dues
Home Improvements
UTILITIES:
Electricity
Water and Sewer
Natural Gas or Oil
Telephone (Land Line, Cell)
FOOD:
Groceries
Eating Out, Lunches, Snacks
FAMILY OBLIGATIONS:
Child Support/Alimony
Day Care, Babysitting
HEALTH AND MEDICAL:
Insurance (medical,dental,vision)
Out-of-Pocket Medical Expenses
Fitness (Yoga,Massage,Gym)
TRANSPORTATION:
Car Payments
Gasoline/Oil
Auto Repairs/Maintenance/Fees
Auto Insurance
Other (tolls, bus, subway, taxi)
DEBT PAYMENTS:
Credit Cards
Student Loans
Other Loans
ENTERTAINMENT/RECREATION:
Cable TV/Videos/Movies
Computer Expense
Hobbies
Subscriptions and Dues
Vacations
PETS:
Food
Grooming, Boarding, Vet
CLOTHING:
INVESTMENTS AND SAVINGS:
401(K)or IRA
Stocks/Bonds/Mutual Funds
College Fund
Savings
Emergency Fund
MISCELLANEOUS:
Toiletries, Household Products
Gifts/Donations
Grooming (Hair, Make-up, Other)
Miscellaneous Expense
Total Investments and Expenses
Surplus/Shortage (Spendable income
If you have any questions about his, just click on my avatar and e-mail me.
The best way is to look at all or your expenses for 2011. we tend to have fairly fixed tax, insurance and housing costs. Housing and utilities should be between 25 and 30 % of your income, Savings should by 10-20%.
If you do not or can not find your expenditures for last year, go to the e-gov and search consumer expenditures for a family of you size in your geographic area as a guide, Many sites such as Credit Counseling, or financial advisers like Dave Ramsey have guides for developing a budget, Just remember to budget for savings, emergency fund and entertainment, They do not have to be a lot, but they are necessary if you want to stay on budget.
Answers & Comments
Verified answer
You didn't write whether this is a personal budget or a corporate budget. I handle a corporate budget differently than a personal budget. (I'm an accountant and I've done hundreds of budgets.). I will assume that you are asking about a personal budget.
The foundation of any budget is good bookkeeping. You need to track your income and your expenses. Set up a budgeting worksheet on Excel, or get Quicken. Quicken will be easier to work with, but it will cost about $60. If you use Excel, then each column in Excel should be one month. Each row should be 1 expense category. Make sure to reconcile your checkbook each month. Failing to reconcile your checkbook is like having a condom, but not using it.
There are some items which are a bit harder to budget. For example, you pay for homeowner's or renter's insurance once a year. Take the bill divide it by 12, and add it to your expenses monthly as an accrued item. Some expenses are unpredictable. For example, you know that your car will eventually need an expensive repair, but you don't know when it will happen. Go through your check register for the last 24 months. Add up all the unexpected items and divide by 24. Then enter that amount on your budget each month.
I suggest you get a book called Bookkeeping for Dummies by Lita Epstein. Please don't be offended by the name. For Dummies is a publishing company. They contract with top authors who are both experts in their field and have the ability to put concepts in simple English.
I listed the categories to start below. Add or delete categories as needed.
INCOME:
Wages and Bonuses
Interest Income
Investment Income
Miscellaneous Income
Income Subtotal
INCOME TAXES WITHHELD:
Federal Income Tax
State and Local Income Tax
Social Security/Medicare Tax
Income Taxes Subtotal
Spendable Income
EXPENSES:
HOME:
Mortgage or Rent
Homeowners/Renters Insurance (actual amount paid)
Property Taxes (actual amount paid)
Home Repairs/Maintenance/HOA Dues
Home Improvements
UTILITIES:
Electricity
Water and Sewer
Natural Gas or Oil
Telephone (Land Line, Cell)
FOOD:
Groceries
Eating Out, Lunches, Snacks
FAMILY OBLIGATIONS:
Child Support/Alimony
Day Care, Babysitting
HEALTH AND MEDICAL:
Insurance (medical,dental,vision)
Out-of-Pocket Medical Expenses
Fitness (Yoga,Massage,Gym)
TRANSPORTATION:
Car Payments
Gasoline/Oil
Auto Repairs/Maintenance/Fees
Auto Insurance
Other (tolls, bus, subway, taxi)
DEBT PAYMENTS:
Credit Cards
Student Loans
Other Loans
ENTERTAINMENT/RECREATION:
Cable TV/Videos/Movies
Computer Expense
Hobbies
Subscriptions and Dues
Vacations
PETS:
Food
Grooming, Boarding, Vet
CLOTHING:
INVESTMENTS AND SAVINGS:
401(K)or IRA
Stocks/Bonds/Mutual Funds
College Fund
Savings
Emergency Fund
MISCELLANEOUS:
Toiletries, Household Products
Gifts/Donations
Grooming (Hair, Make-up, Other)
Miscellaneous Expense
Total Investments and Expenses
Surplus/Shortage (Spendable income
If you have any questions about his, just click on my avatar and e-mail me.
The best way is to look at all or your expenses for 2011. we tend to have fairly fixed tax, insurance and housing costs. Housing and utilities should be between 25 and 30 % of your income, Savings should by 10-20%.
If you do not or can not find your expenditures for last year, go to the e-gov and search consumer expenditures for a family of you size in your geographic area as a guide, Many sites such as Credit Counseling, or financial advisers like Dave Ramsey have guides for developing a budget, Just remember to budget for savings, emergency fund and entertainment, They do not have to be a lot, but they are necessary if you want to stay on budget.