Making a budget

This week, the Office of the Attorney General’s “Consumer Caution Corner” outlines the Federal Trade Commission’s guidance on how consumers can make a budget.

A budget is a plan that shows you how you can spend your money every month. Making a budget can help you make sure you do not run out of money each month. A budget will also help you save money for your goals or for emergencies.

How do I make a budget?

Step #1: Write down your expenses. Expenses are what you spend money on. Expenses include:
Bills:
– bills that are the same each month, like rent
– bills that might change each month, like utilities
– bills you pay once or twice a year, like car insurance
Other expenses, like:
– food
– gas
– entertainment
– clothes
– school supplies
– money for family
– unplanned expenses, like car repairs or medical bills
– credit card bills

You might have bills that change every month. Look at what you paid for the same month last year. You might need $200 for your gas bill in January, but $30 in July.

Step #2: Write down how much money you make. This includes your paychecks and any other money you get, like child support.

Step #3: Subtract your expenses from how much money you make. This number should be more than zero. If it is less than zero, you are spending more money than you make. Look at your budget to see what you do not need or what you could spend less on.

How do I use my budget?

You can use your budget every month:
– At the beginning of the month, make a plan for how you will spend your money that month. Write what you think you will earn and spend.
– Write down what you spend. Try to do this every day.
– At the end of the month, see if you spent what you planned.
– Use the information to help you plan the next month’s budget.

Example budget

Use this worksheet to see how much money you spend this month. Then, use this month’s information to help you plan next month’s budget.

Some bills are monthly and some come less often. If you have an expense that does not occur every month, put it in the “Other expenses this month” category.

Maybe your income is more than your expenses. You have money left to save or spend. Maybe your expenses are more than your income. Look at your budget to find expenses to cut.

Each week, the OAG’s Consumer Protection Education Program (a.k.a. “The Consumer Caution Corner”) shares FTC and/or Federal Communications Commission publications that provide consumers and businesses with the “know-how” to identify and protect themselves from unfair trade practices and marketplace schemes. If you would like to file a Consumer Complaint, please pick up a Form at the OAG (in Capitol Hill) or request one by email from consumer_counsel@cnmioag.org. After completing the Consumer Complaint, please submit it by email or in-person. We cannot act as your private attorney. If you need legal assistance, we will recommend that you contact a private attorney or legal aid organization. We cannot give legal advice or act as your private attorney.

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Michael J. Cyganek is the consumer counsel of the Office of the Attorney General.