Budgeting

The key to a good budget is including as much information as you can. Keep records of your spending so that you can spot places where you can save money and know how much you can afford to spend.

Current income. The first step is to total your income. Include your take home pay plus any tips, child support, investment income, etc.

Monthly expenses. Next, you need to track your expenses. Some bills will vary from month-to-month, so use a monthly average. Example, if your cell phone is $45 one month and $55 the next, estimate $50 per month. For annual bills, divide the yearly cost by 12 for a monthly figure.

Spending money. Rent or mortgage payments plus your credit obligations, should not exceed 35 to 40 percent of your monthly income. The amount you owe on credit cards, monthly car payment, student loans and other monthly payments should not exceed 10 to 15 percent of your take-home pay.

Put it in writing.  Use our budgeting worksheet to help you document and categorize your expenses. Tally up everything you spend money on. Don't forget little things like your daily coffee or snacks. Spanish budgeting worksheet.

Do the math.  The last step in creating your budget is to total all of your expenses and subtract them from your total income.