Current Spending Patterns
 

 

Understanding how you use money is an important step toward managing money to meet your needs and goals. It can also help you make sure that you are spending money on what is most important to you.  This is especially important when you return to work, because increasing your income might reduce your disability benefits and eligibility for other assistance programs.

To get a sense of your spending habits answer the following questions at right:
If you answered “yes” to any question in the checklist, creating a budget (see Creating a Budget) may help you make different choices about how you spend money and improve your ability to pay bills on time.

If you answered “yes” to more than four questions, your overall level of debt is probably increasing and may become overwhelming. Don't give up or deny that there is a problem. You may want to work with a credit counselor or a trusted friend to explore options that can lower your debt level.

If you aren't earning enough money to cover basic necessities, such as food and housing, contact your case manager or local HIV/AIDS organization for help in identifying public and private assistance programs that can help.












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Yes


No
  Are you unaware of how much total debt you have?

  Each month, do you skip some bills to pay others?

  Are you receiving calls from creditors about overdue bills?

  Are you unable to pay for necessities like food, heat, and rent?

  Are you using an increasing percentage of your monthly income to pay off debts?

  Can you only pay the minimum amount on your credit
card(s) each month?

  Do you have money saved for an emergency?

  Have you postponed medical or dental appointments because you can't afford them?

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Creating a Budget

A budget is a tool that can help you to:
See where your money comes from (income)
Notice how you use your money (expenses)
Determine whether you are spending money on what is most important to you
Set future financial goals



The first time you create a budget you may be surprised by what you learn. You may find that there are ways you use money that you like very much, ways that feel uncomfortable, and changes you'd like to make. As you begin the budgeting process, try to be patient. While you may identify positive changes that you want to make, they could be difficult and slow to implement as habits around money are often entrenched.

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Creating a Budget
 

 

Calculate Monthly Income and Expenses

Collect all your salary or wage stubs from the past 12 months and add together your after-tax employment, disability, and other consistent sources of income. Calculate the monthly average income and write it in the first column of the Budget Worksheet below. For example, if your total after-tax income for the past year was $10,000, then your monthly average income is $833 (or, $10,000 divided by 12).

Calculate Average Monthly Expenses

Collect receipts, paid bills, and other records for each expense item listed in the Budget Worksheet. Calculate a monthly average for each item and write it in the first column of the Budget Worksheet. For example, add the telephone bill expense for the past 12 months and divide by 12 to get a monthly average. If you don't have receipts for a full year, estimate the expense. You could keep a record of expenses for a week and multiply the total for each item by 52 to get a yearly estimate (then divide by 12 to get a monthly estimate). For example, if you spent $20 on gas one week, then your monthly estimate would be $20 x 52 divided by 12, or $86.67.

Note: Reviewing your monthly bank statement or checkbook register may help you remember how much you spent on items over the past year.

 Calculate Net Income

To calculate net income, subtract the total expenses from the total income in the first column of the Budget Worksheet. If net income is a positive number, you have money available for savings or to spend. If net income is a negative number, you are either using savings to pay monthly expenses, borrowing money to pay debts, or not paying your bills in full or on time. If your expenses are consistently greater than your income, to reduce debt you will need to cut your spending. A credit counselor could help you determine what cuts you can make. You might also need to talk with your case manager to find assistance programs that will help you meet basic needs.

 Review Patterns

Look over what you have recorded so far on the Budget Worksheet and take a moment to reflect upon the following.
Q: Did anything surprise you?
Do you have money for what is most important to you?
Did you see changes that you would like to make?
Can you make those changes? What would help?

Set Goals

Use the information from the previous four steps to set monthly budgeting goals for income and expenses. Take a moment to think about which expenses are essential, which are nice to have but not necessary and which are unimportant. Write your goal for each item in the second column of the Budget Worksheet. Next, calculate your net income. Remember, net income needs to be positive or zero if you want to avoid an increase in debt levels.

Evaluate How You Are Doing

Each month, make a note of how much you earned and how much you spent on each item in the third column of the Budget Worksheet. Compare those numbers against your budget goals.

Q: How are you doing?
If you are earning less or spending more than you had planned, what changes do you need to make?
What would help you stay on track with your budget?

 

 
 Tips for Successful Budgeting

  Involve everyone who is affected by the budget in the budgeting process.
  Keep your budget in a place where you will see it often.
  Set your savings goals before expense goals.
  Include money for fun activities.
  Use spending precautions, i.e.,
set a spending limit each time you shop.
  If you find that your goals are unrealistic, revise them.
  Don't become discouraged: it takes time to learn new habits of managing money.

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