Simple steps to create your first budget

Managing money is an important life skill, one that gets better with practice. For the new graduates of 2012, here are some tips to help you create your first budget.

Budgeting doesn’t have to be complicated. It mainly depends on assembling some basic information and asking yourself some questions. You can do these things with a notebook, an envelope and a simple calculator.

When creating a budget, here are the key questions to ask:

•How much money is coming in?

•How much money am I spending?

•Where am I spending my money?

•Which goals are important to me?

Your income

For a monthly budget, your income typically is the total monthly take-home pay you receive once you begin working.

To help you plan a budget as you search for a job, you can ask friends, family members, teachers, professors, or professionals in your area of interest about starting pay for specific jobs. You also can find information on average wages for different occupations on Guam at the Guam Department of Labor.

Once you’re working, try to stick to your regular income for this category. If you work the occasional odd job on the side, you can use those funds to make further progress on a goal, in addition to what you normally contribute every month.

Your expenses

To figure out how much money you’re spending, keep all of your receipts. Also, keep notes on what you spend whenever you don’t get a receipt. If you’ve never done this before, it can take some getting used to, but it’ll be worth your while.

In your notebook, keep a page for cash spending, and a page for each account that you have, and record your most recent balances. At the end of every night, take a few minutes to pull out those receipts and add them to your notebook, subtracting those amounts as you go. Record your recurring bill payments as well.

That frequent attention applies whether you use a notebook, spreadsheet, software, or an online program. This way you can monitor the balances for your accounts and the total amount of your expenses as the month goes by.

Your categories

As you add a receipt to your “account” page in your notebook, take a second to think about what you were purchasing. Was it gas? Groceries? A haircut? A dinner out with friends? Pick a broad category, add that page to your notebook, and mark it down. You also can keep a separate list here for your fixed monthly expenses.

Throughout the month, you’ll be able to see how much you spent in a category, and get an overall picture of where your money is going.


When you subtract your bills and spending categories from your income, is there enough left for your goals?

The power of a budget is its ability to present you with choices, based on an accurate view of your current behavior. You can cut your spending, increase your income, or do both to make room for the goals you have. Those decisions are up to you. A good budget simply enhances those decisions by giving you a solid platform to stand on, as you launch your life toward your goals.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 19 years experience in retail banking and with financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover,  please email him at


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