Home Buying » Mortgage Calculators » Home Budget Calculator
Advertiser Disclosure

This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.

Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.

Home Budget Calculator

Managing your monthly budget can be difficult. One of the most important aspects of controlling your budget is to determine where your money is going.

I Don't Need Background, Take Me to the Calculator!

Creating a Monthly Budget In 5 Steps

Making a monthly budget doesn’t have to be as difficult as you might think, if you know the proper steps that you need to follow.

1. How Much Do You Make?

The very first thing you’re going to need to know is how much money you actually have coming in each month.

Look at your paychecks to get this amount and then look at any other income you might have such as alimony, child support or any other types of checks (rental income, settlement checks and retirement checks all count in here as well).

You want to make sure you’re only looking at the amount that you get after the government takes their share.

You may also want to look at any kind of irregular income you get by dividing the amount you get per year across the 12 months that you get in the year. This helps you budget for the money but not account for it all at one time.

2. How Much Do You Spend?

The next step is to take a closer look at how much money you’re actually spending in a given month. You want to look at the regular expenses like your mortgage, your car insurance, your cable bill and so on.

These are the charges that are the same every single month. Then look at some of the variable expenses that could be different, like your grocery bill or your gas bill.

You also want to look at an average of your expenses rather than just looking at one month and assuming all of them will be the same. You need to account for things like insurance, for example, that you might pay once every six months or even once a year. So take an average of what you pay each of those months.

3. What Are Your Goals?

What are the things that you really want to achieve in the future and that your finances are going to help you achieve?

You want to know about your savings goals and your debt payoff goals, for example. And in order to do that you should start by subtracting the money you have going out from the money you have coming in.

If you have a positive number that means you have more money left at the end of the month than you spend. This means you already have enough money to put into your savings.

Start looking at just what you want to do with that money and how you’d like your family to look financially. If you want to be debt-free that could be a good goal. If you want to save money for something big that’s another type of goal you might have. Take a look at all the different options and see what really means something for you.

  • Get out of debt
  • Save for a college fund
  • Save for a down payment fund
  • Create an emergency fund
  • Save for a trip

Write down the goals that mean something to you and decide that you’re going to achieve them by creating your budget.

4. Monitor Your Spending, Create Your Budget

This is where you’re going to want to start creating your budget, but you need to know where you’re actually spending your money first.

Keep track of where you’re using your disposable income, the money left over after you pay your bills and expenses, and see if you’re spending wisely. You can also use apps like You Need a Budget or GoodBudget to help you keep track.

5. Don’t Be Afraid to Make Changes

You should make some changes to your budget every now and then. After all, you’re going to find that some of your goals change or that you achieve some of your goals and want to start working  toward other ones.

You might also find that the budget you set just doesn’t work with your needs or with what’s most important to you. Keep tweaking and adjusting your budget until you get something that you’re happy with and that works for you.

The envelope method, where you put a set amount of cash in different labeled envelopes every month might be a good option. That way you can only spend as much money as is in the envelope and it’s impossible to go over your budget.