Introduction: Creating a monthly budget
We are going to create a montly budget. A monthly budget is a small financial plan. In previous lessons, we talked about creating short term and long term goals. A monthly budget is an example of a short term goal.
Creating a monthly budget will gives us a greater chance of reaching our long term goals.
Let's learn the different kinds of expenses that will be covered in our monthly budget.
Regular Expenses are those expenses you make every month that never change. These expenses are consistent throughout the whole year. This expense will not increase or decrease throughout the whole year.
Enter your monthly regular expenses below. Remember these are expenses you make each and every month.
Irregular expenses are expenses that you know will happen over the course of the year, but you cannot say when you will pay them.
Irregular expenses occur less than a couple of times a year.
One example could be health care. You might need to go to the doctors during the course of the year. There is also the possibility your car or something you own needs repairs.
Instead of paying the irregular expense a few times a year, we are going to set aside a portion of it each month. This will make it easier to pay for it when the times comes because we will have already included the expense in our budget.
We going to estimate our annual expenses. Notice the monthly cost of this expense is to the right.
Variable expenses are expenses you pay every month but also vary month to month.
One example could be food. You know you are going to spend a portion of your income on food each month, but you may eat out a lot on month and not so much another month.
The graph to the right shows an example of variable expenses. In this example, we are paying a different amount for a mobile phone each month. The range is between 20 and 40 dollars.
Next you will add your variable expenses to your monthly budget. Add the minimum and maximum monthly values then click and drag each month's expense.
|Name||Cost Per Month|
|Name||Cost Per Year||Cost Per Month|