It can be beneficial to see an example of a budget when working to get your finances in order. You can avoid leaving anything out of your budget if you have a better idea of what others are including in theirs. When I first started budgeting, I learned a lot about what should be included from other sample budgets. With that, I'm including a sample budget to ensure you include everything the first time. This can be extremely beneficial in avoiding forgotten expenses that can throw your budget off track.
Why is budgeting important?
If you're wondering why you should make a budget, the main reason is that it will help you stay on track with your financial goals. Budgeting can help you achieve long-term financial goals as well as keep spending money on the things that are important to you. Essentially, it can assist you in prioritizing your wants vs. your needs. A budget can also ensure that you have enough money to last until your next payday. You may find that having a solid budget in place gives you more peace of mind as you navigate your finances.Example of a budget
Examining an example budget is one of the best ways to learn about budgeting. To help you visualize a starting point for your budget, I've created a sample budget below based on a $46,000 annual post-tax salary. The examples and estimated costs, as well as an overview of each expense, are provided below. Remember that these expenses can vary depending on where you live, your income, and your financial obligations. However, the purpose of an example budget is to assist you in establishing your baseline. Expense Monthly cost Rent or mortgage payment $1,000 Home expenses $100 Home repairs $50 Car insurance $25 Health insurance $75 Internet $45 Phone bill $35 Gas and tolls $150 Car maintenance $100 Food $400 Pet needs $100 Gifts $25 Taxes $500 Emergency fund $100 Retirement fund $500 Extra debt payments $250 Homeowners' or renters' insurance $10 Subscriptions $15 Medical, dental, and prescriptions $50 Toiletries $20 Personal care $100 Childcare $600 Hobbies $25 Charity $50 Holidays $25 Fun money $50 Monthly total $3,955 Annual total $46,260 Example of a budgetRent or mortgage payment
Unless you've paid off your mortgage or mastered the art of house hacking, you'll need to budget for housing costs. Depending on your location, you may need to spend more or less than $1,000 to live in a secure environment. Downsizing your living space is an easy way to save money. Household expenses Extra home expenses such as utilities and trash collection services will require a budget line item in addition to your rent or mortgage payment. Before moving in, try to estimate the extra costs of a house or apartment. You don't want to be saddled with high utility bills that put a strain on your finances.Home repairs
Unfortunately, property repairs can occur when you least expect them. You cannot simply call your landlord to fix a leaking faucet as a homeowner. Instead, you must foot the repair bill. As a result, homeowners must leave room in their budget for home repairs. Of course, you are unlikely to have a major home repair problem every month. However, if something unexpected occurs, you should be prepared to cover the cost. A sinking fund can be useful in this situation. Automobile insurance If you own a car, one of the many costs you'll have to consider is car insurance. Fortunately, shopping around can help you save a lot of money on car insurance. and looking for discounts. Check out these other ways to save money on your car expenses. Health coverage Health insurance is an important investment. If you work full-time, your employer most likely provides some form of health insurance coverage. If you have any questions about the available plans, contact your human resources representative. You can explore your options in the healthcare marketplace whether or not you have a full-time job. Internet Although interest access in your home is not required, it has become an essential part of our lives. It not only entertains you, but it also allows you to work from home. Telephone bill I pay around $40 per month for cell phone service. However, the cost can vary greatly depending on your phone and provider preferences. Tolls and gas Depending on your commute, the amount you spend on gas and tolls will vary. Consider how much money you spend each month on gasoline and tools. Vehicle upkeep Car maintenance can be an expensive expense. Although regular maintenance expenses such as oil changes are necessary, other expenses such as new tires can throw a wrench in your budget. I recommend setting aside a set amount of money each month to prepare for the inevitable car repair. Food Food costs can quickly add up. Food prices can be a significant cost in your budget, depending on your budget and location. Although there are some ways to save money on food, there is no way to avoid spending money on food. Meal planning is one way to save money on food. This strategy has helped me save hundreds of dollars on food each month. Pet requirements Our four-legged friends have requirements that translate into additional costs for your budget. If you have a pet or plan to get one soon, you must consider their requirements. Food, shots, vet visits, medications, and toys are all examples of pet expenses. Gifts If you enjoy giving gifts include this as an expense. Depending on the level of the opulence of your gifts, you may need to increase the gift budget. (Keep in mind that not all gifts for children must be expensive toys!) Taxes Remember to include taxes in your budget. Although it's easy to overlook your tax burden, you'll need to factor it into your budget. Our full post will teach you how to calculate your post-tax income. The emergency fund An emergency fund can bring a lot of financial peace into your life. However, starting an emergency fund from scratch will necessitate a monthly contribution until your emergency fund goals are met. Learn more about establishing an emergency fund today. Retirement account We'd all like to retire someday. Whether you plan to retire early or later in life, you should begin saving for retirement as soon as possible. A monthly contribution to your retirement account can help you save for the day when you can retire and never work again. Additional debt payments If you have outstanding debt, getting out of debt as soon as possible should be a top financial priority. With that, you can set aside any amount of extra money each month to begin paying off your debt faster. Take advantage of our free course to help you permanently eliminate your debt. Renters or homeowners insurance Paying for additional insurance is a good idea whether you own or rent. If you own a home, you will almost certainly be required to have homeowners insurance. If you rent, it may be worthwhile to pay a small fee to protect your belongings. Prescriptions, medical, and dental We will all have to spend for medical and dental care at a certain point in our lives. Furthermore, many of us must fill prescriptions on a monthly basis. Although your personal circumstances will impact the total costs associated with maintaining your health, it is extremely crucial to budget for your anticipated expenses. Subscriptions Many of us pay for entertainment subscription services such as Netflix or Disney+. Include these monthly expenses in your budget.Toiletries
Hand soap and shampoo will most likely take up a small portion of your budget, but they should be included. Do you get swayed by pretty scents? If you don't pay attention, those small sums can add up. Personal hygiene Hair appointments and nail care are examples of personal care. This category could include anything related to staying healthy and looking good. Childcare Childcare is typically prohibitively expensive. The average cost of childcare in Florida is slightly more than $600. Regardless of where you live, you'll almost certainly need to set aside several hundred dollars each month. Hobbies Hobbies can be very enjoyable to cultivate. You can set aside money each month to support your hobbies. You can also look for free activities like hiking or walking in the park. Charity Generosity is a remarkable quality. Allowing enough room in your budget for your generous spirit is a good idea. Holidays The holidays are a costly time of year. However, by contributing to a sinking fund throughout the year, you will be able to spend less time worrying about money during the holidays. Fun money A small amount of 'fun' money set aside in your budget allows for spontaneity and enjoyment. Whether you want to go on a short day trip or splurge on a new outfit, fun money can help you keep motivated to stick to the budgeting plan.Does your budget look different?
Every budget will indeed be slightly different. Although the basic expenses from this budget example will remain, you should make changes to reflect your personal preferences and priorities. You may decide to include a life insurance premium in your monthly budget to safeguard your dependents. If you need assistance in completing a financial plan that works for you, consult our gratis budgeting course. So, what is the bottom line? A budget can assist you in meeting your financial objectives. Use this budget example as a starting point for creating your own. Here's to making your budget work!