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Budget Tips: Easy Ways to Calculate Your Spending

We’ve talked before about the importance of establishing a budget for yourself and your family. Without that, you can’t even begin to manage your money. Remember that you have to know what money is going out so you can make sure it’s less than what’s coming in.

If you’re like me, the thought of tracking and calculating every single expenditure makes you think that maybe you’ll just go to a movie, rather than digging into that task.

But it doesn’t really have to be a painful process!

Here are some easy ways to calculate your spending:

Do you use a credit card for most of your spending? Download your purchase data (or look at your statement) from the previous month and put each line item into a general subject area (dining out, groceries, clothes, fees, etc.)

The same applies if you use mostly a debit card—download your transactions (or look at your statement) for a month, and assign each one a spending category.

Some companies provide you with a year-end purchase summary that, while a little painful to look at, really gives you a good picture of where your money went that year.

If you mostly use cash, keep a small notebook with you for one week, and write down (in round numbers—don’t make yourself crazy over two cents!) what you spend and where each day. Multiply this by four to get an average month’s expenses.

Look into the future:

Sit down and think about the next six months. Now make a “shopping list” of everything you think you’ll have to spend money on. Rent? Check! Dentist visit? School fees? New tires? Check! Check! Check!

Also include any financial plans you might have: paying off a credit card or loan, setting aside savings, etc.


Add up your “shopping list” and divide it by the number of months it’s for—in this case, six.

Add this to the monthly expenses you’ve tracked in the first section.

Take a look at the total and see how it compares to your household’s monthly income. You probably know what your paycheck usually is, and don’t forget to check on your spouse’s average monthly income, and any other sources you might have (disability, Social Security, alimony, etc.).

Hopefully, your spending is less than what you are bringing in. If not, you know what to do—see where you can cut!

Congratulations! You now have a spending plan, or budget! Even without writing everything down each and every month, you’ll know what your financial picture is, and what you can—and can’t—afford.

Questions? Stop in at any of our convenient locations—we’ll be glad to help!


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