Most people earn pretty much the same amount of money each month.  In addition, excluding vacations and big ticket items, most people spend the same amount of money each month as well.  If you fit that description, then putting together your monthly cash flow budget should be a piece of cake.

When preparing your budget, you need to project your cash inflows and outflows on a monthly basis.   You then subtract your projected outflows from your projected inflows to determine whether you're working at a surplus or a deficit.

If your inflows exceed your outflows, you should allocate the monthly surplus to your savings and debt reduction goals.

If you calculate that you're working at a deficit, you have three options.  You can cut some monthly expenses, find another source of income, or continue living (temporarily) knowing that your monthly outflows will (temporarily) exceed your inflows.

Your inflows might include:

• Salaries and wages

• Self-employment income

• Investment income that's not re-invested

• Rental income

Your outflows might include:

• Auto expenses, including loans/leases, fuel, maintenance and repairs, and insurance

• Home expenses, including your minimum monthly mortgage payment or rent, utilities, home repair and supplies, and cleaning and maintenance

• Minimum monthly debt payments including credit cards, student loans, and equity loans (see below)

• Children's expenses, including clothing, toys, baby food, and diapers

• Everything else including clothing, dining and entertainment, gifts, groceries, health and beauty, and insurances.

To help you prepare your Monthly Cash Flow Budget, you can:

• View our completed example
  
  
• Print out our blank template
  
  
• Download a Microsoft Excel spreadsheet with the completed example and the blank template

Why Use Only the Minimum Debt Payments?

The purpose of your budget is to calculate how much extra money you'll have left over each month to allocate to your various savings and debt reductions goals.  To help decide how to allocate additional money to any of your debts, take a look at setting your savings and debt reduction goals.

Time Saving Tip:  Using a program such as Quicken or Microsoft Money makes this step much easier. 

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Still Burdened With Student Loan Debts?

If so, check out FinancialAid.com to find out if you're a candidate to consolidate your student loans.  Consolidating might make sense to you if you meet the following criteria:

• You currently have $10,000 or more in student loan debt. (Even one student loan can be consolidated.)

• You wish to lower your monthly payments.

• You'd like to make one convenient payment instead of several.

• You prefer to take advantage of the low interest rates currently available and focus on paying off other unsecured debts such as high interest-rate credit cards.

• You're looking to purchase a home and want to lower your monthly payments to qualify for a better mortgage.

What Type of Loans Can be Consolidated?

Stafford and PLUS, Perkins Loans, Federal Insured Student Loans (FISL), Health Professional Student Loans (HPSLs), Loans for Disadvantaged Students(LDS), Federal Direct Loans, National Direct Student Loans (NDSL), Nursing Student Loans (NSL)

If you're considering consolidating your student loans, check out FinancialAid.com for plenty of information about student loan consolidation plus lots of great on-line tools as well.