ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Create a Personal Budget That You Can Use

Updated on December 16, 2016

One New Year’s Resolution You Can Keep

On January 1st you vowed to yourself to eat better, workout more, and... stay out of debt. Your trips to the gym may have gotten farther and fewer between, but that last resolution is one you should really keep. And daunting as it may seem, drafting a budget and sticking to it, is not as hard as you think. Creating and maintaining a budget is not only good for your financial well-being, but also good for your peace of mind.

If you have any semblance of a checkbook, or financial records, break them out. Look over your bare minimum expenses, that is, the bills you absolutely must pay to get by without creditors calling to collect. These include rent/mortgage, utilities, student loans, taxes, transportation, car and home insurance, medicine, and anything else you need to live (need being the operative word). Add those items up, and subtract from your monthly income for February. Yes, as in 4 weeks pay. I will explain this later. If this is difficult for you, use what I call the "Rule of 13". Take your annual net income and divide it by 13.

Large or small, there should be an amount remaining. (If you are negative, you are in trouble...If that is the case, see "Why are you Broke?", This amount will cover the remaining expenses you have. Let me show you, using a $45,000 salary as an example:

Rent: $895

Utilities: $120

Loans: $100

Car payment: $200

Car insurance: $80

Gas: $60

Total: $1455

Income (take home): $33,000/annually

$33,000/13 = $2,538/month

So this individual has $1,083 per month to cover all of their additional expenses.

Now, write out everything you regularly spend money on... groceries, going out, education, healthcare, clothing, pet supplies, vacations, membership fees, work expenses. Use your checkbook, or credit card statements to ensure you are not forgetting anything. List the reoccurring expenses, and then the unplanned ones. For example:

Groceries: $200

Entertainment: $300

Clothing: $200

Education: $150

Health Club: $50

Total: $1000

This person would have then $183 per month to cover her additional expenses, such as gifts, vacations, and unexpected costs like car maintenance. And that's without saving a cent!! Or is it??

Here's where the "Rule of 13" comes in. If you get paid on a weekly basis this is easy. If you are paid biweekly, it is a little more challenging, though all it really requires is a bit more willpower. Let me explain. By using the "Rule of 13", you save one month's worth of salary per year! That's right, by living on 4 weeks of pay per month, you spend 48 weeks worth of salary. Leaving 4 weeks of salary to go into savings over the course of the year! All you must do to adhere to this is be sure you are putting anything you deposit into the bank above and beyond your monthly allowance, in this case $2,538, into a savings account.

So, savings are covered, and our example has $183 per month to cover all her miscellaneous costs. Put this amount per month into savings account as well, and here is what to do. Determine what your miscellaneous large costs are, for example, Christmas gifts or vacations, and budget for them. Then also budget for the small miscellaneous costs in a lump sum. Here, I have also included an ‘Additional Savings' category. (If you can manage it, you should aim for your annual savings to total the maximum deductible IRA amount, currently $3,000. For more info, see "Roth or Traditional IRA?"

Here is how it would work for our example:

Additional Savings: $30

Christmas: $50

Vacation: $50

Miscellaneous: $53

Total: $183

That way, six months from now, when your friends are talking about a road trip to Miami, rather than trying to scrape up the dough to go, you have $300 effortlessly socked away to use stress free.

Sure, it takes work, and a little bit of willpower. But trust me when I say that buying yourself that new purse will be a lot nicer, knowing you have $200 budgeted for it anyway. And you can treat yourself, without sacrificing paying the electric bill to do so.


    0 of 8192 characters used
    Post Comment
    • profile image

      Transportation Collection Agency 

      8 years ago

      Thanks for the hub....I sure would like to see your budget now.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)