Think you’re good at managing money? Got a top notch credit score? Do you have a comfortable income that doesn’t make you stretch your dollars every month? Congratulations ― you still need a personal budget.

Any financial coach will tell you that making a monthly budget is one of the smartest money moves you could make. Your budget is your spending plan. Sticking to it means ensuring you always have money for surprise events, things you really want, or ongoing financial security. It could mean helping you get out of debt, or if you’re not in debt, a monthly budget helps you stay that way.

Motivations to Budget Your Money

Money means different things to different people. For example, some people have a goal of retiring early, so good budgeting can help to make this dream come true. Others have money troubles that keep them up at night, so a budget may help to curb spending, get out of debt, and enjoy a better night’s sleep.

Think about what money means to you. What are your money goals, and how can a personal budget help you reach them? Once you find your own motivation, creating a monthly budget becomes more than just an exercise in responsibility.

What’s in a Personal Budget?

Making a budget has a lot of moving parts. Start by calculating your monthly after-tax income. Then, make a list of all of your monthly expenses, such as power, water, rent or mortgage, transportation, food, cell phone, and more.

Now, add up these costs and compare them to your income. If your costs are more than your income, clearly you need to cut back your spending somewhere. But if there’s money left over, you’ll need to decide if it’s enough to achieve your goals.

A good rule to follow is the 50/30/20 rule, where 50% of your income goes to necessities, 30% goes to wants, and 20% goes to debt and savings. DIY Monthly Budgeting Made Easy

Creating your personal budget is easier when you have a worksheet that does all the calculating for you and ensures no expenses have been overlooked. Download our Budget Questionnaire to find opportunities to improve your spending and savings strategy!