I've had a few clients ask for assistance creating budgets lately. While I'm certainly not an accountant, CPA or really anything even close to that, I am able to provide some ideas about the basics of creating a budget.

The first thing to do is figure out what your expense will be that you have to pay - mortgage/rent, utilities, insurance. Make a list of all the types of costs you know you'll have monthly. Go through your files and wallet to help jog your memory of what you might have. If you pay something semi-annually, like car insurance, break it down into what the monthly cost would be (divide it by six).

Next, list out expenses that you anticipate to some degree. This includes public transit, prescriptions, gas, groceries, memberships and subscriptions. Do your best to estimate what the monthly break down of these items currently is. Take a look at a couple bank statements to get a better idea of what you're spending.

Third, list out anything you'd love to be able to afford - vacation, retirement savings, gifts. Don't fill in a cost of these items yet.

At the bottom you'll total the expenses you do have (from the first two parts of the list). Now, you'll also need to know how much money you have coming in each month. What's the difference between the total of costs so far and the income? If you're already over, it's time to reassess some of the costs from the second part of your list. If there's still some money leftover, divide it however it suits your goals best between the items in the third part. For example, there's a $1,500 difference between regular expenses and income each month. Decide how much of that $1,500 should be deposited into your retirement account, how much should go into savings for vacation and how much you can spend on going to the movies and getting birthday gifts.

Now, the hard part is to put it in to practice and actually follow the plan!

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