How to Make a Budget: Making a Fund Allocation List

Wouldn't it be easier if you have a means to remind you of your budget? In this way you will be reminded of how much of your income you are free to spend.

To do this you have to make a Fund Allocation List.

STEPE4: MAKING A FUND ALLOCATION LIST



The above image represents the fund allocation list of an average income family with one child.

Things to take note of this list:
(1) The list should show your estimated take home pay. Try to be as accurate as possible with the figures.

Take Home Pay = Income - Deductions

(2) The list should show all the items you allocated you money, the amount allocated to each, and the total.

(3) Make sure that your total allocated funds will not exceed your take home pay. Doing so without extra income on the sides is like digging a financial grave -- burying yourself with debt or burning your savings.

(4) Some funds don't have to go to the envelopes. Generally, these are the funds that will be used everyday (allowance, food) or will be exhausted soon (vitamins, grocery, etc.) Examples are allowances which normally go straight to the pocket, and food (grocery) and home-use items (soap, detergent, shampoo, etc.) which normally go straight to the department store cash register right after the payday.

(5) Be creative with your list; make use of colors to make it easy to read. For example, the items hi-lited in pink will be endorsed to the wife, the blue to the husband, and the green to the E-bank.

(6) Print your list and keep a copy in your office, and in the place where you keep the envelopes. Refer to this list before you make a withdrawal from the ATM machine, and when you make a deposit to the envelopes.

In making the list, you can use word, excel and other word processors. If you have no computer then you can write your list in a notebock or piece of paper.

Now live a financially disciplined life!

PS: Previously, in my budget portfolio I did not include this list. But after I incorporated it, it made quite a difference. It made me realize quickly whether I have a money to spare or not from my income. It also help me realize how much is the minimum amount of money I need to generate on the sides.

PS: If you want to know more how to save money, how to avoid debt, how to get out of debt, and how to make a budget then click HERE. This is the home page of my blog where I shared my knowledge and experience in budgeting, expense tracking, financial planning, and making a budget that is not only doable but I actually proven for 8 years. I also shared tips, which I actually use regularly, on how to save money, where to save your money, and in the process you will know how to avoid debt. Learning to avoid debt is easier than getting out of debt so I put more emphasis on staying out of debt. As a bonus, I also assembled information on how you can make your own financial planning and budget software. To get all this information for free, please click HERE.

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