Creating a Budget for Discretionary Spending
In this article, we will discuss the importance of creating a budget for optional expenses and how to use this worksheet to analyze the amount of money you can spend according to your preferences.
How to Use This Worksheet
In this section, we will explain how to use the worksheet to determine the money available to you for discretionary spending by entering all your expenses and income. You can also expand the sheet to include other items and create a complete budget worksheet.
Reducing Discretionary Spending
In this part, we will review the bills that can easily be reduced if you need to cut spending. This may be a matter of personal opinion, as some people find it difficult to envision that some of these items, such as cable TV and home internet, are optional. However, if you think about it, they are not essential for survival, regardless of how much you love TV shows, Facebook, or online gaming.
Examples of Discretionary Expenses
We will provide a list of some common discretionary spending items. You can start by entering the amount you think you spend on each item in the middle column, then review your bank statements and credit card bills from the past few months and enter the actual amount you spend on them monthly. If you typically use cash, you may need to set aside two months to track your expenses first.
The Next Step in the Full Budget
If you used your necessary income and expenses worksheet, you can now add the total fixed and discretionary amounts. If you are spending more than you earn, you should consider cutting back on spending. Avoid incurring debt or worsening your debt to solve the overspending issue.
The Final and Hardest Step in Budgeting
The hardest part of creating a budget is not determining the fate of your money or setting spending limits. The hardest part is following the budget you created. Many people create budgets and intend to stick to them, but the discipline to adhere to the budget is what most people struggle to do.
Take advantage of the support from your spouse or partner to help stay within the budget by setting shared goals. They should have the same financial goals as you do, otherwise, it will significantly reduce the likelihood that both of you will follow the budget. Tell your friends about your budget and ask them to help you stick to it as well. With a plan and support from friends and loved ones, sticking to a budget becomes easier and you can allocate some amounts for discretionary spending.
Source: https://www.thebalancemoney.com/budget-worksheet-discretionary-spending-453594
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