Personal budget

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

A budget allocates or distributes expected income to expected expenses and intended savings. The following sample illustrates how income might be allocated.

Average annual expenses (2014) per household in the United States are:

A variety of tools are helpful for constructing a personal budget. Regardless of the tool used, a budget's usefulness relies on the accuracy and currency of the data. Computer generated budgets have become commonly used as they replace the need to rewrite and recalculate the budget every time there is a change.

A simple budget can be written on a piece of a paper with a pencil and, optionally, a calculator. Such budgets can be organized in ring binders or a file cabinet. Simpler still are pre-formatted budgeting books or bookkeeping forms in which a budget can be created by filling in the blanks.

Spreadsheet software allows budgeting by performing calculations using formulas, for example in keeping track of income and expenditure. A drawback of budget spreadsheets is that some do not offer date-shifting, so information has to be reentered or moved at the end of each month.

Some software is written specifically for money management. Products such as MoneyWiz, Fortora Fresh Finance, Moneydance, Quicken, Microsoft Money (discontinued), and GnuCash are designed to keep track of individual account information, such as checking, savings or money-market accounts. These programs can categorize past expenses and display monthly reports that are useful for budgeting future months.

Several websites, such as Mint.com and Housebudgetplanner.com and FamBudge by Socuis have been devised to help manage personal finances. Some may have a privacy policy governing the use and sharing of supplied financial information.

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