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Creating a Personal Budget

Step 1: Estimate Your Monthly Income

Enter your monthly income before any taxes or other deductions are taken out... This is your  Monthly Gross Income. You can get this figure a few different ways:

  • Gross monthly income = Gross annual salary divided by 12 (months) ... example $52,000 divided by 12 = $4,333
  • Gross monthly income = (Your hourly pay rate X number of hours worked per week X 52) divided by 12... example ($25 per hour X 40 hours per week  X 52 weeks)  divided by 12 = $4,333
  • If you're not working but still want to practice creating a personal budget, just enter $4,333
  • This will give you Your Monthly After-Tax Income

NOTE: Federal and MA State Taxes are estimates based on a $4,333 monthly gross income. Rates will vary based on your monthly income.

Monthly Gross Income
Federal Taxes
MA State Taxes
Total Taxes
Social Security (6.20%)
Medicare (1.45%)
Total FICA
Estimated Monthly After Tax Income

Step 2: Allocate Your Monthly Savings

Look at the 20% Savings Goal (which is 20% of your monthly after-tax  income) and decide how you want to allocate all of it so that it shows a $0 Balance when you're done with this section. Here's a few suggestions:

  • We highly recommend putting some funds into your Emergency Fund each month until you have 3-6 months of expenses in that fund. 
  • Each month you should be setting aside some money for Retirement. Learn more about employer/employee contributions and matches.
  • One good use for Short Term savings is for those bills that come due either twice a year or annually. Other uses could include first and last month's rent and a security deposit for an apartment; Christmas presents, vacations, or a car.
Savings Emergency Fund
Minimum of 3 months of expenses
Money you won't touch until retirement
Short Term
Money you'll spend 6 months to 3 years out
Long Term
Money you won't touch for more than 3 years
Total Savings 20% Savings Goal

Step 3: Enter all of your Monthly Expenses

Look at the 80% Expenses Goal below (which is 80% of your after-tax monthly income)  and enter your expenses or anticipated expenses so that it shows a $0 Balance when you're done with this section. Again, if you're a student and/or not working, feel free to use the national averages.

  • If at all possible, experts recommend that you try to keep your total housing and utilities expenses to about 30% of your monthly expenses. 
  • Miscellaneous expenses might include child care, pet care, entertainment, gym fees, clothes, etc.

Note: As you use the Income, Savings and Expenses sections, you'll see that some of the line items have links that can provide additional information. 

Housing Rent
Mortgage / Property Taxes
Insurance (Renters or Homeowners)
Utilities Electricity
National average $120 per month
Gas / Propane
National average $100 per month
Internet Services
National average $100 per month
Cable TV Services
National average $210 per month
Streaming Services
National average $48 per month
Trash Services
Transportation Auto (car loan)
Auto (insurance)
Auto (gas, parking, tolls, other)
Bus / Train
Food / Supplies Groceries
National average $300 per month per person
Insurance Medical
National average $400 per month for individual
Other Debt Student loan
Credit Card
Total Expenses 80% Expenses Goal