How to Set Up a Budget..Monthly Bills

How to set up a budget, this is step one determining your monthly bill.

Last time, we talked about the importance of a budget. You may now see you really need a budget. But you may not know how to set one up. Maybe you’ve just never really consider how to budget. That’s all right, during the series I’ll take you step by step in setting up a budget. It all comes down to balancing what you having coming in with what you are paying each month, and tracking it.

Setting Up a Budget, Determining Your Monthly Bills

Track your Expenses

The first thing I  would suggest you do is track your expenses. You can do this by getting out your last 2-3 months bills or pulling up your accounts online. If you have bills that come less often, get those too.

Now start,  by writing down all your month expenses. Every bill you pay every month should be written down first.
Then add in the bills you get every other month. Then finally add any bills that come quarterly or less often. If the bill amount changes each month then you may want to pull out as many back bills as you have and take an average.

Average your Bills that Vary

For instance our electric bill, runs almost the same year round, except for January, August and September. I might choose to use an average for this bill. By averaging a bill, I know that some months, I will have extra money and other months I might be putting away a little less than what the bill is. By storing the extra money on the months that are below average, I can build up a reserve to cover those higher than average months. This way in on a month with a higher bill I have the money waiting for me to use.


How to set up a budget, this is step one determining your monthly bill.

Handling Irregular Billing Cycles

Some of our household bills only come every other month. When I am determining how much to set aside for those bills, I take the amount the bill is or the average if it varies, and divide by two. That will gives me the amount I need to put aside each month.

For quarterly bills you’ll divide by three to get your monthly rate and so on. Once you know the total amount of money needed to cover your monthly bills you can start building your budget.

After you have determined the cost or the average cost of all of your monthly bills. We can move on to the next step.

The Next Step

The next step will be to determine how much you spend beyond your bills.
Do you know how much you spend on food?
Do you know how much you spend on other items like, clothes, out to dinner, or just everyday stuff you do?

In the next post, I will explain how to gather all the info you need to determine your spending in these other areas. Until then just tally up your bills. Then congratulate yourself, you are one more step closer to knowing where you money is going each month.

See the first post in this series, The Importance of a Budget

See all the money related post by clicking here.

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4 thoughts on “How to Set Up a Budget..Monthly Bills”

  1. I’m one of those weird people that gets a kick out of tracking her expenses. Like, down to the penny! I love seeing my monthly budgets, though of course when it’s tight, it’s tough as well. But that’s how I know to rein in on spending and save more, by simply tracking it.

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