Developing a Budget

A budget is your own personal money plan. It will help you organize your money, set and reach your goals and decide in advance how your money will work for you.  Developing a budget will help you…

  • Start an emergency fund
  • Pay bills on time to avoid late fees
  • Pay off debt
  • Save for education
  • Buy a house

5 Steps for Making a Budget

Step 1: Total your monthly income, including bonus, commission, retirement, etc.

Step 2: Track your expenses.

  • Fixed expenses – costs that always occur and don’t vary in amount, i.e. rent/mortgage, groceries, and utilities
  • Variable expenses – costs that occur regularly but vary in amount, i.e. car repairs, holidays
  • Discretionary expenses – Indulgences, i.e. concert tickets, restaurants

Step 3: Calculate and record monthly expenses. Use a budget book, computer software, or budget form.

Step 4: Compare your income to your expenses.

Step 5: Evaluate and adjust your expenses.

Organize Your Important Papers

  • Make Temporary / Annual Files that contain records and information accumulated throughout the year.
  • Make Permanent Files that are not often used but are important.
  • Discard files and papers that are unnecessary!

What to keep: 

  • Bank statement for 6 years
  • Canceled checks for 6 years
  • Contracts Updated
  • Home purchase documents
  • Investment records 7 years or permanently
  • Loan agreements until paid in full
  • Real estate deeds until transferred
  • Service contracts & warranties until expired
  • Tax returns for 7 years
  • Vehicle titles as long as you own the car
  • Will updated
  • Insurance records annually

Make a Binder Containing: 

  • Personal directory
  • Professional directory
  • Personal property inventory
  • Net worth statement
  • Budget/special expenses
  • Loan Papers
  • Income tax information
  • Rental or lease agreements
  • Insurance policies
  • Social Security benefits statement
  • Birth certificates SS cards and Credit report

-Content provided by America Saves.  For more information visit

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