It is essential to find the right budget tool to help you get your personal finance situation back on track. This free monthly budget calculator will give you a great head start to put your money habits down on paper so you can see where you need to cut back or adjust.
This will help you create a spending plan so you can identify areas to adjust to ensure you have a fully-funded emergency fund. After that, you can focus on your retirement account and tackle your debt repayment. My free budget calculator will give you a budget breakdown that may open your eyes to some frivolous spending habits.
How Do You Calculate A Monthly Budget?
A budget is the first step in any successful money management plan. Knowing how much money is coming in each month and exactly where it goes is something everyone needs to do to ensure their money is going towards things that bring them value. This plan requires you to use a monthly strategy rather than an annual net income budget.
Monthly Net Income
The first step is to calculate your total monthly income. Your budget will always start with your total monthly income after taxes. The first section of this free budget calculator requires you to enter your after- tax monthly pay, as well as any extra income you expect to receive.
Extra income may include side hustles or off duty jobs you currently do.
Use the “+” buttons to expand each category. Entering your amounts into this cost calculator will automatically total your amounts.
Household Budget - Total Monthly Expenses
To identify your monthly expenses, look over your financial statements from the previous month. Focus on separating what your living expenses include as well as your discretionary spending. During this process, it is crucial to uncover everywhere you spent money. After we fill out the monthly budget calculator, we can move on to identifying areas to cut back and start saving.
**For annual expenses, divide the total cost by 12 to factor it into a monthly plan.
Housing And Utilities
While housing and utilities are necessities, it doesn’t necessarily mean there are not areas in which we can save money and free up some funds. Be sure to look through previous monthly expenses to identify how much you spent on:
- Rent, Mortgage Payment
- Home Equity Loan or Second Mortgage
- Home Insurance (if paid separately)
- Homeowner’s Association Fees
- Home Repairs & Maintenance
- Electric & Gas
- Water, Sewer, and Trash
- Phone Bill
- Internet and/or Cable
Many of us spend more on our vehicles than we really need. These areas will help you genuienly identify how much you are spending on transportation and where.
- Vehicle Payment
- Second Vehicle Payment
- Vehicle Insurance
- Vehicle Maintenance
- Misc. Vehicle Expenses
Full disclosure: I have always struggled with my grocery budget. With a family of five, it always seems we spend much more on food than we really should. While we have cut back on restaurant dining, we are still working on scaling back the amount we spend on daily groceries.
- Household Goods
- Eating At Restaurants
Personal Hygiene And Personal Care
These expenses often fluctuate from month to month. Look at your last month of expenses and fill in the information.
- Medical (co-pays and other expenses not covered by health insurance)
- Prescription Drugs
- Term Life Insurance
- Misc. Expenses
- Haircut and/or Style
I had no idea how expensive kids were – until we had them. Be sure to count all of your costs related to your children.
- Child Care Expenses
- Child Support Payments
- School Tuition & Supplies
Hopefully, you were able to pay more than the minimum payments on your debt last month. However much you were able to put towards your specific debts, be sure to include it in this budget calculator.
- Credit Cards
- Personal Loans
- Medical Debt
- Student Loans
- Tax Debt
- Misc. Debt Payments
Last but not least is the misc. expense section. Because personal finance should be personal, this section is for all of those uncommon expenses that you and your family spend on each month.
- Fun Money
- Monthly Subscriptions
- Church Tithe & Charitable Donations
- Animal Care
- Holidays & Birthdays
- Other Expenses
Calculate Your Results
Once you enter all of your financial information, it’s time to see how you are doing and where you could improve. Use the results button to calculate your current situation in my free budget calculator.
How Do I Stop Living Paycheck To Paycheck?
Living paycheck to paycheck, as you know, is not fun. The first step to proper money management is to do a budget to see exactly what financial position you are in and where you are spending your money. After uncovering your spending habits, start budgeting intentionally, and make a budget planner that you can use to your advantage. After creating a monthly budget, follow these steps:
- Create an emergency fund of at least $1,500
- Start paying off debt – one debt at a time. Use the debt avalanche or debt snowball method
- Save up more cash to cover 3 – 6 months of necessities
- Contribute at least 18% of your income towards a retirement account
- Save for college or any other specific high dollar future expense (if any)
- Pay off your mortgage
- Invest even more money!
I wrote a detailed article about how to stop living on monthly payments.
How Much Should I Be Spending A Month?
As I stated earlier, personal finance is personal. I can’t tell you how much you should be spending in any given category because it all depends on what you value in this life. If you enjoy buying coffee every day but need to save money, try cutting back in another area. Force yourself to only spend money on what brings you value rather than spending out of habit.
For more guidance, check out my related article on the 50/30/20 budget and how you can use these percentages to help structure your budget.