Jane Doe earns $10 an hour and works 40 hours a week. Her weekly income, after taxes, is approximately $287. Jane's goal is to save enough money to pay for a vacation at the end of the year and to still have some extra money left over in case of an emergency. Below is a sample of her monthly budget, which shows her income, her monthly expenses, and how much money she will be saving.
|Monthly Income After Taxes ($287/week x 4 weeks)||$1,148|
|Gas and Electric||$50|
|Car Upkeep (gas, etc.)||$50|
|Total Monthly Expenses||$755|
|Money Available After Expenses||$393|
|Entertainment Money Movies, eating out, etc.||$160|
|Savings by the End of One Year||$ 2,796|
As you can see from the above, Jane first figured out how much she earned each month and how much she had to spend on necessities like rent, utilities, food and medicine. This left her with $393 to spare after necessities. Jane decided that she could spend up to $40 a week on entertainment (movies, books, eating out, etc.), which added up to $160 dollars a month, but still left Jane with savings of almost $250 dollars a month. Over the course of one year (12 months) these savings added up to almost $2,800 (even more, if Jane is putting her money in a savings account with interest), so now she can take a vacation for $800 and still have $2,000 for emergencies, big purchases, or to set aside for retirement.
Not everyone will have as simple a budget as Jane's or be able to set aside as much money each year, but once you create a budget for yourself and become comfortable managing your money, you may be surprised at how much you can save.
Print out the PDF version of this worksheet so you can complete and create your sample budget.