#1 Update it. Dave Ramsey has an excellent saying on this subject. In his words a budget is “On paper, on purpose, before the month begins.” That means that if today was July 16th, you have until July 31st to have your budget for August complete and ready to go.
The reason why you need to create a new budget every month is because every month will look different. Some months your income will be different that other months and expenses will almost always look different from month to month.
There are three different expense categories when it comes to your budget. Those categories are fixed, variable and non-monthly.
Fixed Expenses: These are monthly expenses that do not change and are the same every month. Typically this would include expenses like rent, mortgage, etc.
Variable Expenses: These are monthly expenses that vary from month to month. Variable expenses typically are groceries, gas, utilities, etc.
Non-Monthly Expenses: These expenses happen every year, but not every month. Budget items that fall into this category are things like clothing, insurance premiums, tags for your car, gifts, etc.
I strongly recommend using premade budget forms. That way you have a check list to go through each month. It will help remind you if this is the month you are going to (for example) receive a quarterly bonus or have your car’s oil changed – Free Budget Forms Here.
- Download free budget forms
- Fill out the budget