Calculator: Budget Blueprint

Budget Blueprint encourages consumers to develop their own spending plans. This easy-to-use budget work sheet will help you see where your money is going and will help you adjust your spending where needed. The new online format allows you to input expenses and income while listing individual savings goals. It's a quick way to see where you are financially and plan for where you want to be.

Once you open the link below: Click at left to enter expenses and income

Click "calculate" for expense and income totals

Print your form for reference; you won't be able to save data

Now start by clicking here to open the Budget Blueprint calculator window.

Making the most of your resources

Budgeting doesn't mean having less; it means doing more with what you have. Your budget will change as your needs and wants change.

Design your own plan. A new college graduate doesn't usually need to own a home, but as income rises and a new family begins, most young people hope to. Breadwinners with dependents need life insurance, but few retirees do. You'll never be ready for the next phase unless you make the most of what you have now--with a spending plan.

Scrutinize

Your first step, no surprise, is to find out how you spend money now. Sort out your obligations with this Budget Blueprint. Use your share draft register or checkbook and current bills.

This is only a tool for you to use in coming up with your own spending plan. The Blueprint is comprehensive. It most likely includes categories that aren't part of your usual spending and saving plan. Use it to jog your memory about small and large expenses, and to plan for changes you anticipate. Include an entertainment category--fun and luxuries. If your plan doesn't make room for fun, you'll soon abandon it. And make all family members part of the plan; it won't work without cooperation.

Analyze

Use the time columns to help you picture spending over time. For example, you pay rent or your mortgage once a month. If you have trouble making this monthly payment, try putting aside half each payday if you're paid biweekly, one-quarter if you're paid weekly.

Gain perspective on smaller outlays, too. Say you spend $1 each day to buy two cans of soda at work. That's $5 a week, $250 a year.

Use this principle in reverse for once-a-year costs, such as a property tax payment. That payment can be a strain, but if you plan for it and put aside one-twelfth monthly or one-fourth quarterly, you can meet the payment without anxiety. Put the set-aside in a share savings or money market account. You'll benefit twice--by having the money on hand when the bill comes and by earning dividends on the shares.

So, you know where the money goes. Can you trim insurance premiums but get the same coverage by shopping different agents? If your grocery outlay seems high, ask yourself how much food you waste. Try planning menus and then making shopping lists.

The point is, you should be able to find some fat in your budget. But what about lean? Are savings a little thin?

Don't make the common mistake of saying you'll save what's left over--you know that means you won't save at all. Look at your near-term plans first. If you're hoping to buy a new car, are you putting enough money aside weekly or monthly to meet your down payment goal? Maybe you're hoping to vacation next year without relying so much on your credit cards. Decide how much you'll need, then meet your goal by arranging for payroll deduction at your credit union. Your long-range target should be to save three to six months' net earnings.

Try to anticipate changes. If you'll be driving more, for instance, you'll spend more on gas and car upkeep. Maybe some costs will go down, if you pay off a loan, for example. Divert at least part of any paid-off loan payment or pay raise to your share savings or money market account.

Realize

As you use the Blueprint and your expenses come into focus, you'll want to make changes. Use the "goals" column to note what improvements you want to make, and by what time. This way you can chart your success--the best incentive to keep at it!

The savings and installment payment categories have room to show at what percentage rate you're saving and borrowing. For savings, record annual yield to see at a glance which accounts are doing the most for you.

Installment payments, on the other hand, will hurt you more at higher rates. Say you have a national credit card at 19% annual percentage rate (APR), a credit union auto loan at 5% APR, a local department store account at 18% APR, and a student loan at 6% APR. Of course, always make at least your minimum monthly payment on each obligation, but beyond that, pay off faster the bill that costs you most. See if your credit union offers a credit card at a lower interest rate.

Use your credit card statements to break down expenses by category--so much for clothing, for example. Just be careful not to put the figures in both clothing and installment payment categories or your total expense will be wrong.

January 26, 2004