First Things First

• Make a list of your monthly bills. If it happens every month, write it down.
  
  • Examples: Cell Phone, Electricity, Rent/Mortage, Insurance, Car Payment, Gym Membership, Gas, Groceries, etc.
• In the next column, list the approximate amount each month. If you’re debating, always pick the higher amount. Budget for a little more than you expect.
  
  • For things like groceries or gas, go to your bank/credit card statements for the last full month. Add up what you spent and then round up.
• Add a row for Savings and Spending Money, but leave blank.
• Total everything up.
  
  • Add a row and put in what you make AFTER taxes each month
  • Subtract your total bills from what you make.
  • This should be positive, but don’t get happy yet.
• Balance what's left between Spending Money and Savings.
  
  • Short on money? Go back to that list of bills and see what you can take out. 
  • Can you get 10% of your income into savings? Do that first and then figure out spending money. Savings is really important in the long run. You’ll need it more often than you think.
  • Want to know where you can save? See our article on savings tips.

Money Management Time

To everything set up in your MMS, take the budget you prepared in the above steps, and make a line item in your checking account for each budget item.  Post date each line item way in the future (January 1, 2040 for example), that way it will keep it at the bottom. I’d recommend making a line item for those things that go together, such as home and car expenses. Things like mortgage/rent, cable, electricity, etc. will go in the home line item.

Those are your Buckets.

Example:

If you get paid monthly, you’re done. If you get paid weekly, bi-weekly, semi-monthly, you’ll have to figure out what you pay for out of each paycheck.

• Check your due dates on bills to make sure you have the money in your account for that bill way before it’s due.
• If you need to, most companies will be happy to change your bill date. Trust me, they’d rather do that and have you pay on time.

When you get paid, use your Excel spreadsheet to siphon out your money into their respective buckets. Anything left over goes to savings. If you have quite a bit left at the end of each month and all your expenses are properly accounted for, you may consider setting up an investment account.