Recently my son approached me to say that he was moving out of the house. Immediately I did a happy dance in my head. Once the celebration was over I was curious to hear what he thought was the single most important thing he needed to do in order to make this a reality. So, I asked him. As I had suspected, his answer was finding an apartment. I gave him the look that a mother gives their child when they are mentally saying, “Really!”
I am here to tell you that the single most important thing you need to master before you pick where you are going to live is your monthly budget worksheet. You are only setting yourself up for failure if you do not know what your monthly expense will be versus your monthly income. So, before you go full speed ahead looking for your next home, let me show you the ropes.
First, you need to find a worksheet that is easy and includes everything you need to consider. You can look online to find a printable budget worksheet, a free budget worksheet, or a budget worksheet pdf version. All of these options will be helpful, but you need to be sure they are inclusive of all expenses and easy for you to understand.
Budgeting worksheets do not have to be complex, however they do need to be all inclusive. First, I would suggest to see if anyone has a family budget worksheet that you could copy. If they do, they would be the best people to talk with about setting up your own personal budget worksheet. However, we want to get you moving, so we are going to give you the tools to do so, right here!
You will need to gather the following information:
√ Pay dates for entire year.
√ NET monthly income (this is the amount of money you receive from your paycheck after deductions).
√ If your pay is variable (not the same amount each week), use an estimated on the lower side of your usual average (i.e. If you generally net $1,000 to $1,100 bi-weekly, use $950 – $1,000 for budgeting purposes).
√ All fixed expenses (always the same dollar amount).
√ All variable expenses (dollar amount varies from month to month).
Note: This worksheet may be altered to include other financial contributions, however this example will concentrate on a single income.
Things to Keep in Mind
2. NEVER include over time pay. Over time is not always a guarantee.
3. Not all expenses are monthly. You may have expenses that occur quarterly or yearly. Be sure to account for those expenses in the correct month that they will be incurred.
4. Some months there will be an extra pay period (generally 3 times a year). As best practice, save the additional income for investments and unplanned expenses.
5. Once you have all of your expenses loaded you will be able to figure out what you can comfortably spend on a month’s rent. Remember, do not spend every penny you have each month because you never know when an emergency may arise!
Additional Moving Expenses
Don’t forget to set aside money for initial moving expenses: Security deposits, pet deposits, closing costs, moving expenses, deposits on utilities (if you have bad credit or no credit), and extra grocery shopping in order to stock your kitchen.
Here is an example of a four week budget of regular monthly expenses:
The budget worksheet gives you a reality check on your finances. Maybe you can afford more than you originally thought? Maybe you need to hold off for a few months to save some additional money? Either way, you now have a clear picture of your financial status and can make decisions based on facts, not fiction.