Balance my budget

Balance my budget

Tip: For easier reading, click (above).

You should balance your budget so that you make conscious decisions about how you use your income, instead of leaving extra money in your checking account and spending it just because itÆs there. Also, you will have a more useful forecast.

The goal of budgeting in Money is to allocate the right balance of money toward the right goal:

Long-term savings Allocate enough money to pay for your long-term goals.
Occasional Expense Fund Allocate enough to these accounts to have a rainy day fund and pay for infrequent expenses throughout the year.
Debt Allocate enough in your Debt Reduction Plan to chip away at your long-term credit card and other high-interest debt.
Expenses Allocate enough to pay the bills.

Make sure youÆre not planning to save and spend more than you earn by reviewing the monthly and annual summaries. The Monthly Summary shows you what a "typical" month looks like using the budgeted figures you propose. The Annual Summary shows you your year at a glance.

If need be, adjust the amount of money allocated to each part of your budget to make your Annual Summary balance.

My Yearly Summary balances, but not my Monthly Summary. Why?

This is probably because the Monthly Summary does not include occasional income and expense amounts; only monthly amounts. Occasional amounts are included in the Yearly Summary.

Also, if certain income or expense amounts end before year-end (you'll see an asterisk next to the line item), your budget may be a little high one month and a little low the next.

My Monthly Summary balances, but not my Yearly Summary. What should I do now?

1 In the left pane, click Monthly Summary.

If your monthly budget balances, your occasional expenses exceed your occasional income.

Be sure that you've clicked Save it in my Occasional Expense Fund to make any excess funds from your Monthly Summary available for occasional expenses.

2 If your annual budget still doesn't balance, revisit the Income, Long-Term Savings, Occasional Expense Fund, Debt, and Expenses places.

Make sure you have accurately indicated your amounts shown in the Occasional column for each of these places.

3 If necessary, find ways to reduce the expense and debt amounts you have budgeted.

Play Money 99's Budgeting Philosophy video.

Play the Creating a Budget video.

How do I troubleshoot other problems with my budget?

How can I review my budget forecast?