Budget Example (Predictive and Historical)

Earlier this week I wrote about how to create a predictive budget.   Creation and upkeep of this can be an invaluable took; simply by doing this, you can figure out where your money is going and how to keep more of it in your pocket (or, rather, in your banking, savings, investment, and other accounts)!

Pictured below is an example of what a predictive budget will look like.  By including all of the categories, you can get a great feel for where your greatest expenses are – be flexible with these, and know that over time they will adjust as you learn.

Example Predictive Budget

As you can see, the amounts remain fairly steady for the initial budget and the categories aren’t fully fleshed out.  At this point, the budget is being used predictively.  Budgeting is an evolving process – as you become more financially healthy, you will learn more about what your finances look like and can use the information you gather to make it more accurate.

Take a look at the next budget.  THIS is where your budget is going to become extremely useful – combine the expense log you’ve created (your historical budget) with your predictive budget!

Combining Expenses And Budget

You can see in the example where more was spent than intended.  By  marking the food expense for the next month, you know what you need to cut back on and pay the most attention to.  Adding a few more months of expense information will allow you to be able to better predict what you are going to spend in a given month – you’ll start to notice trends and figure out what you have to do!  More on this later in the week.

Tags: budget activities, Budgeting, expense log, finances, goals, lists, setting goals, The Expense Grid, tracking