Making a personal budget is one of the most important things a person can achieve in long-term financial health. Of course, there are as many different kinds of budgets as there are people, but only two or three general templates are in common use. It’s important to understand these generalized budgeting methods so that you can fine-tune one of them to meet your own particular needs.
A detailed budget can help you save money regularly, get your spending under control, show you how you might be able to boost retirement funds and uncover opportunities for extra earnings. No one should be without a personal budget. If you don’t have one currently in use, here are the steps for creating one that will work for you.

Use Nine or More Categories
A comprehensive budget should categorize items into at least nine categories: entertainment, debt, transportation, food, housing, clothing, savings, insurance and healthcare. Many financial planners use a “20-50-30” budget approach. Twenty percent of your income, under this plan, goes toward debt and savings items. Thirty percent goes toward discretionary items like restaurant meals and vacations. The rest, 50 percent, goes toward everything else.
List Your Income Sources Carefully
Every good budget lists sources and uses of income. That process begins with a detailed examination of your methods for bringing money into the budget. In addition to a job that provides a regular stream of income and various benefits, many people earn royalties, stock dividends, or acquire cash by selling life insurance policies at less than maturity value. One source of reliable information about such settlements is at www.masonfinance.com. Among all the steps of budget-building, the most important one is your detailed list of all possible sources of income.

List Every Expense Accurately
The area where people often lose their way when making budgets is in the area of expenses. This is especially true with items that have to be estimated. Always try to use “worst case” estimates whenever possible. That way, if the actual expense ends up being less, you’ll have a bit more money to adjust other items with, or to put into savings.

Set Goals for Retirement and Savings
A budget should always include a long-term goal for savings or retirement accounts. If you’re able to put 20 percent of each month’s income into this category, your financial health will improve as time passes. If your income allows, it’s even better to aim for a higher percentage of savings or a higher overall amount to save each year.

Use a Spreadsheet to Track Everything
Especially during the first few months after making the budget, spend a few minutes each day looking at your spending, income and savings amounts. Track every dollar you spend for 90 days and you’ll end up having a solid grasp of where your money goes and whether there are any problem areas. If your income or expenses change significantly, or if you get a new job with a different pay and benefits structure, consider re-doing your budget. But in most cases, it’s best to stick with the first budget you created and just adapt it for any minor changes in your financial life.