How to Prepare a Cash Budget

by Carter McBride ; Updated July 27, 2017
Creating a cash budget will help you save money.

A cash budget breaks down cash inflow and cash outflow during a period of usually a month. By creating a cash budget, you can see where you spend most of your money. This will help you cut unnecessary expenses. A cash budget will also show how much money you have at the end of the period to save or if you are losing money each month with your expenses.

Step 1

Gather your receipts from the previous month. This includes items such as rent, food and credit card payments. Also find a copy of your paycheck and any other sources of income.

Step 2

Sort through the receipts and take out any extraordinary costs. These are costs which are unusual and infrequent. For example, if you had to pay $500 to fix your car, then remove that receipt. Gather together similar costs; for example, all receipts for food should be together.

Step 3

Add together all cash inflow. This will be your monthly pay and any other income, such as interest. For example, if you make $5,000 a month after taxes and also earn $50 a month in interest, then your total monthly income is $5,050.

Step 4

Add together all cash outflow. For example, if in the past month you spent $150 on food, $700 on rent, $100 on utilities, $20 on credit card payments and $60 on gas, then your total monthly expenses were $1,030. Subtract $1,030 from $5,050 to get $4,020. Therefore, you have $4,020 of disposable income for the month.

Step 5

Break down the disposable income from Step 4 into savings and a portion for emergencies. In addition, you can analyze your expenses and decide if there are places where you can reduce your spending. For example, you may find that you pay too much for gas and can decrease your expenditures by biking to work or that you pay too much for utilities and can cancel your cable television.

Video of the Day

Brought to you by

References

About the Author

Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.

Photo Credits

  • Cash image by Greg Carpenter from
Cite this Article | raiffeisen-cards.ru A tool to create a citation to reference this article Cite this Article

Related pages


appreciation letter for financial assistancedirect deposit available at midnightsouth carolina state income tax refund statusare bonuses taxable in canadarent assistance for single momshow to file taxes without a w2penalty for false tax return1040x efileebt high schoolhow to get rid of a car that is financedhow much does notary service costwww pnm com pay billssdi creditshow much is a 1878 morgan silver dollar worthsallie mae forbearancepostal money orders verificationapply for army rotctrack money order by serial numbercalculating ebitda multiplewhat is ach withdrawalhow to calculate the herfindahl indexnc medicaid requirementsbeneficiary ira definitionbrighthouse.com pay billthe balance in the prepaid rent accountfree tubal reversal grantssocial security disability taxationserved a summons for credit card debtcanceling a real estate contracttrade off synonymcreative loafing dealshow to calculate mpldoes a last will and testament need to be notarizedhow to compute for cagrindiana landlord lawspay dating sitesgap insurance nissanarkansas quit claim deed formsale of depreciable asset income taxnotify irs of deathdo landlords check credit scorescan i pay pg&e with credit cardis it hard to get insurance on a salvage titledeed in lieu of foreclosure taxesgeico apartment insurancemoneygram money order how to fill outis a credit score of 638 goodcredit score 547sams club auction sitehow to calculate an annuitygeorgia amended tax return statusis the pell grant estimate per semestertsp one time withdrawalwhy do i have an escrow shortagenmac interest ratesgaap definition of capital expendituredividend capturedo you repay pell grantsdebt to tangible net worth ratioamerican heart association cpr card replacementdefine ledger accountdo you pay taxes on workmans comphow do you calculate accumulated depreciationlegally separated tax filing statuscan you get gap insurance anytimewhat is the difference between pre authorization and precertificationfinancial intermediary examplesmedicare part b premium tax deductionlast month rent deposithow long does it take to repossess a carfreddie mac debt to income ratio guidelineshud bid process