2. List your expenses
Fixed expenses
Once you’ve looked at your income, it’s time to focus on your expenses. There are all sorts: rent or mortgage, transport, food (groceries and restaurants), clothing, insurance, services (telephone, cable, Internet), leisure activities and pocket money. And don’t forget what you spend on other people… including your pet! These are all recurring expenses that you can plan for every month.
Occasional foreseeable expenses
You should also take into account expenses that are predictable but not monthly: gifts, holidays, school fees, etc.
Unexpected expenses
Finally, there are unforeseen and unforeseeable expenses, such as car repairs or replacing a broken appliance. To cover these expenses, having an emergency fund equivalent to about three months’ salary is recommended.
Repayment of debts, loans and cards
Of course, when you list your payments, you should also take into account any monthly instalments you have to make to repay your debts, loans, cards or lines of credit.
Save your money!
You should also save at least 5% of your income for retirement or other projects.
Once you’ve compiled all this, enter the figures into the online budgeting tool or Excel file, category by category.