How do I Best Use a Monthly Budget Calculator?

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  • Written By: Keith Koons
  • Edited By: Lauren Fritsky
  • Last Modified Date: 31 August 2019
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A monthly budget calculator is designed to help homeowners determine their exact income and plot out their recurring expenses in order to properly balance their finances. The best way to use a monthly budget calculator is to honestly assess where 100% of the household income goes each month. Once the wasted spending areas have been identified, they can be reduced or eliminated to bolster savings or to pay off debt.

Many would feel that a monthly budget calculator is designed for those who are not sound planners when it comes to money, but the truth of the matter is that a monthly budget calculator can be very beneficial to anyone. At a glace, a monthly budget calculator may appear quite complex, but it simply includes every single area that a household could spend money on. It is quite necessary when planning a budget to account for even the most trivial of purchases so that all of the household income can be accounted for, but at the same time, a portion of the budget should always be set aside for expenses like leisure and maintenance. The main goal of a budget is to create a way to live within a certain means.


When looking at a monthly budget calculator, there are several categories that should be divided into sections. The first area to fill out normally deals with the overall household income, and all sources should be included. After that comes the set monthly expenses like electricity and mortgage payments; this area is factored in early in the equation because it needs to be addressed no matter what. Then, users will come to the non-recurring monthly payments section; this includes items like credit cards and vehicular payments. Even though these items still have to be accounted for each month like the other bills, the goal of a monthly budget calculator is to eliminate these expenses as quickly as possible.

The final sections of a monthly budget calculator deal with everyday purchases, and they should cover everything from chewing gum to top-end electronics. These are the areas where consumers normally have the largest problem answering honestly, as they don't realize that multiple small daily purchases add up to quite a substantial amount by the end of the month. Groceries, gasoline, and entertainment should also be listed within this section to create an overall picture of where the finances are allocated to each month, and once everything is calculated, it is relatively easy to examine for wasted purchases. Perhaps the best use of a monthly budget calculator is to eliminate as many of these unnecessary purchases as possible and apply those finances towards short-term debt. Once the first short-term loan is paid off, its entire balance should be rolled over to cover the second largest short-term debt, and this process should continue until every controllable fixed monthly expense is eliminated.


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