![]() Most people who use a budget create wonky numbers in their heads based on the income they take home also called net income. You probably never thought you’d go backward to create a monthly budget but trust me, this exercise is a valuable tool. Using a Historical Expense Tracker to build a budget is the most crucial step toward accuracy by documenting where your money was spent. You need to know where your money is going every step of the way. ![]() We are incurring more debt such as credit card debt, loans, personal loans, etc.įor example, if your hydro bill increases by $15 a month, this needs to be reflected in your budget immediately.ĭon’t wait until the end of the year to review the budget to make changes, do them as you go along.Debt-free, such as having extra money to invest.Increased expenses such as bills, property taxes, rent, mortgage, or other related expenses.Decrease in earnings such as a lost job, death, divorce, child support, etc.Increase earnings such as an income raise, passive income, second job, extra income, or marriage. ![]() Keep in mind that budget numbers will change when This information helps us create our new year’s monthly budget at the end of December. To be transparent, we wish we had tracked historical and current data when we started budgeting.Īt the end of each year, we tally up our expenses for each budget category and divide them by 12 months to get our historical data. So, you probably want to know the CBB Historical Expense Tracker details. The same is valid with budgeting, especially for those who want to create an accurate budget without tracking forward. Often, when humans are told to be patient or to wait, we become antsy and want to know now, not tomorrow. If you think about creating a budget using three months of historical data works just as well for someone new to budgeting. The idea revolved around seeing whether the user could handle a mortgage and everything that came with owning a house before buying a home. When I blogged about creating a mock monthly budget that included a mortgage, that’s where the idea of historical data came to fruition. CBB and I have discussed the value of historical expenses for creating a budget. In my 10-Step Budgeting Mini-Series, I discuss tracking receipts and their importance.
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