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Budgeting can be a very valuable way to keep tabs on your money and make sure you are moving toward your financial goals. By using a personal monthly budget calculator, you can better understand your income, spending, and savings to stay on track or make adjustments as needed.
Here, you’ll learn how to use this free monthly budget calculator, plus gain valuable insights into budgeting techniques and tips.
Key Points
• With a free monthly budget calculator, you can start by entering monthly income before taxes and then input income taxes from pay stubs.
• Adding all monthly expenses, including fixed and variable costs, can help you track spending.
• The calculator determines net monthly savings by subtracting total expenses from income.
• Experiment with different budget scenarios to plan for financial goals.
• Use budgeting methods like 50/30/20, zero-sum, and envelope systems to find the right fit and gain better financial management.
Calculator Definitions
When using your free monthly budget calculator, you’ll want to have your financial details available to enter. Here’s a selection of the information you’ll need handy:
• Income: Enter your monthly income before taxes
• Income taxes: Account for federal, state, and municipality income taxes, which will vary depending on your total earnings and qualifying deductions or exemptions
• Housing: Include rent or mortgage payments, utilities, property tax, insurance, and home maintenance expenses
• Groceries: Tally food, toiletries, and household supplies
• Entertainment: This spending category is where you account for dining out, events (movies, plays, concerts), streaming services, sports tickets, books, and hobby-related costs
• Debt payments: This includes monthly payments on credit cards or to lenders for student loans, mortgages, personal loans, auto loans, or other types of loans or lines of credit
How to Use the Monthly Budget Calculator
A free monthly budget calculator can help you take control of your money and reach both short- and long-term financial goals. This tool can show you how your spending shapes up and reveal how much you are able to save each month.
Step 1. Enter Your Monthly Income
The first step is entering your total monthly income before taxes. You can check your pay stubs to find your pretax earnings. If you’re paid weekly or biweekly rather than monthly, you can multiply your pretax earnings by the number of paychecks you receive annually (52 or 26) and then divide by 12 to determine your monthly income.
Step 2. Enter Your Income Taxes
To find this information, rather than finding your tax bracket and crunching the numbers yourself, you can check your pay stubs to see how much you’re paying toward income taxes. Then multiply that amount like you did above for income to find your annual income taxes and divide by 12 to get the monthly figure. This will be subtracted from your income by the monthly budget calculator.
Step 3. Add Your Monthly Expenses
There are a good number of spending categories (such as health care, clothing, education, and transportation) included in the monthly income budget calculator. You can consult your credit card or bank statements to tally up the totals for each category. (Some financial institutions give you a snapshot of your spending categories; double-check that they align with what you are inputting into the calculator.)
As you enter this information, you are likely to see how your needs vs. wants compare. You may be surprised, for instance, to see how your grocery bill (reflecting your needs) and your dining out expenses (which are wants) stack up.
Step 4. Determine Your Net Monthly Savings
After entering your income taxes and other expenses for the month, the monthly budget calculator will reveal your spending and your net savings (your income minus everything that is deducted from it). Note that one of the calculator’s categories captures any deposits you are already making into savings accounts, so what you see under “net savings” is essentially the additional funds you have to apply toward your financial goals. Those might include paying off credit card debt or saving for a wedding.
Benefits of Using a Budget Calculator
There are several benefits to using a budget calculator. Consider the following:
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A budget calculator automatically determines where you stand in terms of your earnings, spending, and savings, without you having to use a calculator or pencil and paper.
• The free monthly budget calculator can provide a clear view of your income, spending, and savings, so you can retool your budget as needed, such as reducing a category of spending (a money tracker can help with this, too).
• The monthly personal budget calculator can help you improve financial management. It gives you a relatively quick and simple way to view the money going in and out of your checking and savings accounts. You can use this information to plan well for the future.
When using this monthly budget calculator, note that the output will only be as accurate as the information you put in. It can be worthwhile to do some upfront work to tabulate your income and expenses to make sure you aren’t guesstimating.
How to Use the Monthly Budget Calculator to Compare Scenarios
It can be helpful to experiment with different dollar values to see how extra earnings, additional debt payments, or changes in expenses will impact your monthly budget. For example:
• You could check whether picking up a side hustle would give you some extra wiggle room in your budget to accrue savings without cutting expenses.
• Alternatively, you might forecast what your future budget will look like after eliminating recurring debt, such as a car loan or student loans.
What Is a Budget?
Simply put, a budget is a plan for how you will save and spend your money you earn for a specific period of time. Personal budgets are usually structured monthly to account for bills and expenses due each month, including rent or mortgage payments and student loans, as well as buying your favorite breakfast burrito on Saturday mornings.
Budgets can be used to track spending to help prevent you from going into “bad” debt or to work toward specific savings goals, such as an emergency fund. Whatever your intention, budgets can be a helpful tool for better managing your finances.
How to Budget
There’s no one-size-fits-all approach to budgeting. Start by asking yourself key budgeting questions to identify your needs and goals. For instance, are you prepared for unexpected expenses? Would it benefit you to allocate enough time to really understand where every dollar of your income goes? Are you advancing toward your long-term plans, like homeownership?
Making a budget involves repeating the steps outlined above: adding up your income, calculating your income taxes, tallying up your expenses across spending categories, and allocating money to savings.
In addition to this monthly budget calculator, there are apps and strategies to help streamlining budgeting. Check to see if your financial institution offers an online budget planner that can help track spending and even spot unwanted expenses like subscriptions. If you don’t find a tool you like there, try third-party options, some of which may have free versions.
If you want to delve more deeply into budgeting once you’ve compiled all the essential information on income and expenses, there are multiple types of budgeting methods to consider using. Here are a few budgeting plans to look into.
• 50/30/20 budgeting: This method divides your monthly income into three buckets: 50% for needs, 30% for wants, and 20% for savings, like retirement or short-term savings targets, and additional debt payments. It offers some built-in flexibility, making it ideal for beginners.
• Zero-sum budgeting: Every dollar you earn is accounted for with this method, and it’s assigned a specific purpose, such as savings, debt repayment, expenses, or discretionary spending. This involves more effort to track how money is being used, but could yield richer insights about exactly where your money goes.
• Envelope-system budgeting: With this technique, you create envelopes for each spending category at the start of the month and put the allotted amount of cash inside the envelopes. The idea here is that you only spend the allocated amount of cash. If you wind up short on entertainment money on the 20th of the month, for example, then you need to hold out without any more entertainment spending until the next month starts, or you can borrow funds from an envelope where you have a surplus.
• Line-item budgeting: To implement this approach, create a column naming all income, expense categories, and savings, followed by one column for each month of the year. You’ll enter all your earnings, spending, and saving, and track your progress. It’s helpful to set targets for each category and leverage a spreadsheet on your computer to adjust as needed.
• Pay-yourself-first budgeting: Also known as reverse budgeting, this method automates savings from your paycheck. After paying yourself first (putting aside a certain amount for savings), the remaining money is intended to cover both nonnegotiable expenses and discretionary spending.
Coming up with a budgeting plan that works for you can take some trial and error. Here are a few tips to create an effective budget and stick to it.
• Track spending: Using an app can help automate this process. Not having a system to track spending is one of the most common budgeting mistakes.
• Plan for unexpected costs: Building up an emergency fund that can cover up to six months’ worth of expenses is recommended so you are prepared for medical bills, car repairs, or gaps in employment.
• Overestimate your expenses: It’s better to err on the side of caution and anticipate more spending on budget categories that aren’t fixed, such as groceries and transportation. (Don’t forget: Inflation is often a factor to contend with.)
• Don’t forget about those occasional expenses: It’s common to overlook infrequent expenditures like birthday and holiday gifts for loved ones and charitable donations during the year. Make sure to account for them.
• Involve a friend or relative: Accounting for all income and expenses in your household is essential to a budget. If you’re budgeting for one, finding an accountability buddy can help you both stay on track toward your financial goals.
Using a monthly budget calculator can give you a clear picture of how you’re earning, spending, and saving each month. After recording all your income, taxes, and expenses and checking your monthly status, using a budget strategy can help you progress toward your financial goals. A money tracker and other tools can also benefit you in this pursuit.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights—all at no cost.
See exactly how your money comes and goes at a glance.
Calculating your monthly budget involves balancing your income, expenses, and savings. There are different techniques to do this, such as the 50/30/20 budget rule or the zero-sum system, but the ultimate goal is to optimize your money and reach your financial goals.
What is the 50/30/20 rule for budgeting?
The 50/30/20 rule for budgeting calls for using 50% of income for needs, 30% for wants, and 20% for savings and additional debt payments.
What is the 70/10/10/10 budget rule?
The 70/10/10/10 budget rule divides income between four buckets: living expenses (70%), savings (10%), investments (10%), and charitable donations (10%).
How do I find my monthly budget?
To calculate your monthly budget, you need to find your income, expenses, and savings. Check pay stubs for a breakdown of your income and taxes, and consult statements from your bank, credit card, loan servicers, and investment accounts to get an idea of spending and saving every month. Then experiment with different systems, such as the 50/30/20 budget rule or the envelope system to land on a method that works for you.
How do beginners budget monthly?
Beginners can budget monthly using several methods. The 50/30/20 rule is an easy and flexible budget plan for beginners to follow. Others may prefer the envelope system since it’s a very tactile, hands-on way to see where your money is going.
What is the best free budgeting app?
The best free budgeting app depends on your needs and goals. You might start by seeing what tools your financial institution offers and then move onto third-party options. Using a monthly budget calculator can give you a valuable snapshot of your earning, spending, and savings before choosing a specific app.
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