Preparing for Your Budget – What Information to Gather First

Creating an accurate budget starts with having the right information at your fingertips. Before you dive into building your budget, take a few minutes to gather these essential financial details. Having everything ready will make the budget creation process faster, more accurate, and less stressful.

Why Preparation Matters

A budget is only as good as the data you put into it. Gathering your financial information upfront helps you:

• Create realistic budget amounts based on your actual income and expenses
• Avoid missing important categories that could derail your budget later
• Save time during budget creation by having everything organized
• Make informed decisions about where to allocate your money

Information to Gather Before You Build Your Budget

✅ Take-Home Pay

What it is: Your monthly income after taxes and deductions.

Where to find it:
- Your most recent pay stub (look for "net pay" or "take-home pay")
- Bank statements showing direct deposits
- If you're self-employed or have variable income, average your last 3-6 months

Why it matters: This is the foundation of your budget. You can only budget money you actually receive, not your gross salary.

Pro tip: If your income varies month-to-month, use your lowest recent month as the baseline, or calculate a 3-month average for a more realistic starting point.

✅ Fixed Expenses

What they are: Costs that stay the same each month.

Common fixed expenses include:
- Rent or mortgage payments
- Insurance premiums (health, auto, home, life)
- Loan payments (car, student loans, personal loans)
- Child care costs
- Subscription services and memberships (gym, streaming services, software)
- Phone and internet bills (if on fixed plans)

Where to find them:
- Check your bank or credit card statements for recurring charges
- Review automatic payments set up in your accounts
- Look at your calendar for annual bills that you pay monthly (divide annual by 12)

Why it matters: Fixed expenses are non-negotiable and must be accounted for first in your budget. Missing one can throw off your entire financial plan.

Pro tip: Don't forget annual or quarterly expenses. Divide them by 12 or 3 respectively to get the monthly amount you should set aside.

✅ Variable Costs

What they are: Costs that change month to month.

Common variable costs include:
- Utilities (electricity, water, gas, heating/cooling)
- Groceries and household supplies
- Fuel and transportation costs
- Shopping (clothing, home goods, personal items)
- Dining out and entertainment
- Travel and vacations
- Personal care and grooming
- Medical expenses (co-pays, prescriptions)

Where to find them:
- Review past 2-3 months of bank and credit card statements
- Look for patterns in your spending
- Check your app's transaction history if you've already imported data

Why it matters: Variable costs are where most people overspend. Having realistic estimates helps you set appropriate budget limits and identify areas where you can cut back if needed.

Pro tip: For categories with high variability (like utilities), use a 3-month average. For categories you want to control (like dining out), look at your recent spending and decide if you want to maintain, increase, or decrease that amount.

✅ Debts, Including Interest

What they include: All money you owe to others.

Common debts include:
- Credit card balances
- Student loans
- Medical bills
- Personal loans
- Car loans
- Any other outstanding balances

Where to find them:
- Check your credit card statements for current balances and interest rates
- Review loan statements for remaining balances and payment amounts
- Check your credit report for a comprehensive view of all debts

Why it matters: Understanding your total debt and interest rates helps you prioritize which debts to pay off first (typically highest interest rates first) and ensures you're budgeting enough for minimum payments.

Pro tip: List each debt with its balance, interest rate, and minimum payment. This helps you see the full picture and make strategic decisions about debt payoff.

How Our App Makes This Easier

Once you've gathered this information, our app streamlines the budget creation process:

Automatic Transaction Import

Import your bank and credit card CSV files to automatically populate your transaction history. This gives you real data on your variable costs without manual entry.

Budget Averages Report

Our Budget Averages Report analyzes your historical spending and suggests realistic amounts for each category based on your actual transactions. This takes the guesswork out of estimating variable costs.

Statement Reconciliation

Upload PDF statements to anchor your account balances, ensuring your budget starts with accurate numbers.

TagMatcher Rules

Set up automatic categorization rules so your transactions are automatically tagged as they're imported, making it easy to see spending patterns across categories.

Quick Checklist

Before you start building your budget, make sure you have:

1. Your most recent pay stub or income documentation
2. List of all fixed monthly expenses with amounts
3. 2-3 months of bank/credit card statements for variable costs
4. Complete list of all debts with balances, interest rates, and minimum payments
5. Any annual or quarterly expenses calculated as monthly amounts

Next Steps

Once you have all this information gathered, you're ready to create your first budget. Check out our guide on How to Create a Budget for step-by-step instructions using our app's features.

Ready to Get Started?

Having these details ready will make creating your budget quicker and more accurate. Sign up for free and start building your budget today with all your financial information organized and ready to go.