Some folks sail through life without a rudder, wondering why they keep going in circles. A plan, no matter how small or crooked, is a sight better than no plan at all. It doesn’t have to be perfect—perfection is for folks with too much time and no sense—but it’ll keep you from hitting the same financial rocks over and over. This little exercise here isn’t gospel; it’s just a map. You’ve got to chart your own course, but even a rough sketch beats wandering blind.
The Budget Breakdown
Here’s a step-by-step guide on how to create a budget with ChatGPT using monthly and weekly expenses, as well as income, to calculate how much is left at the end of the month, while also saving 10% of your income:
Step 1: Input Monthly Expenses
List all your recurring monthly expenses with their due dates. For example:
- Mortgage: $1,200 (due by the 6th)
- Utilities: $200 (due by the 10th)
- Car payment: $300 (due by the 15th)
- Insurance: $150 (due by the 20th)
Step 2: Input Weekly Expenses
List recurring weekly expenses that occur every week. For example:
- Groceries: $150/week
- Gas: $50/week
- Entertainment: $30/week
Step 3: Input Income
List your income sources, including amounts and dates received. For example:
- Salary: $1,000 every Thursday
Step 4: Calculate Savings
Set aside 10% of your total income for savings.
Example Budget Creation:
Inputs:
- Monthly Expenses:
- Mortgage: $1,200 (due 6th)
- Utilities: $200 (due 10th)
- Car payment: $300 (due 15th)
- Insurance: $150 (due 20th)
- Weekly Expenses:
- Groceries: $150/week
- Gas: $50/week
- Entertainment: $30/week
- Income:
- Salary: $1,000 every Thursday (4 paychecks in January)
- Savings:
- 10% of income is automatically saved.
Budget Calculation:
Monthly Income:
- Weekly salary: $1,000 × 4 weeks = $4,000
Monthly Savings:
- 10% of $4,000 = $400 set aside for savings.
Weekly Expenses Total:
- Groceries: $150 × 4 = $600
- Gas: $50 × 4 = $200
- Entertainment: $30 × 4 = $120
- Total Weekly Expenses: $600 + $200 + $120 = $920
Total Monthly Expenses:
- Mortgage: $1,200
- Utilities: $200
- Car payment: $300
- Insurance: $150
- Weekly expenses: $920
- Total Expenses: $1,200 + $200 + $300 + $150 + $920 = $2,770
Leftover After Savings and Expenses:
- Income: $4,000
- Savings: $400
- Expenses: $2,770
- Leftover: $4,000 – $400 – $2,770 = $830
Final Budget Breakdown:
| Category | Amount |
|---|---|
| Income | $4,000 |
| Savings (10%) | $400 |
| Total Expenses | $2,770 |
| Leftover | $830 |
Key Points:
- You’ll be paid every Thursday (January has 4 Thursdays: 4th, 11th, 18th, 25th).
- Ensure your mortgage is paid by the 6th of each month from your first paycheck.
- Allocate savings automatically when you receive your first paycheck.
- Adjust leftover funds for discretionary spending or additional savings.
HOW TO CREATE YOU BUDGET USING AI
To create a budget specifically for a couple, here’s a set of prompts you can use with ChatGPT to guide the process:
Step 1: Set the Context
Prompt:
“We are a young couple looking to create a budget. We have monthly income, fixed expenses (like rent, utilities, car payments), and variable expenses (like groceries, dining out, and entertainment). We also want to save 10% of our income each month. Help us create a plan that shows how much money we’ll have left over at the end of the month, and project our savings for the year.”
Step 2: Input Monthly Income
Prompt:
“Our combined monthly income is $6,000. We each get paid bi-weekly. Can you calculate our monthly and yearly income based on this?”
Step 3: Input Fixed Monthly Expenses
Prompt:
*”Here are our fixed monthly expenses:
- Rent: $1,800
- Utilities: $200
- Car loan payment: $400
- Insurance: $300
- Student loans: $500
- Internet: $100.
Can you add these up and calculate how much is left after deducting these from our income?”*
Step 4: Input Variable Monthly Expenses
Prompt:
*”Our variable expenses include:
- Groceries: $600
- Dining out: $200
- Entertainment: $150
- Gas: $250.
Please include these in the budget and show how much we’ll have left after these expenses.”*
Step 5: Add Savings
Prompt:
“We want to save 10% of our total income every month. Please deduct this amount from our remaining balance and show us how much we’ll have left for discretionary spending or other goals.”
Step 6: Adjust for Annual View
Prompt:
“Can you project our budget over the year, including savings, fixed, and variable expenses? Also, calculate how much we will have saved by the end of the year.”
Step 7: Consider Additional Goals
Prompt:
“We are planning a vacation in 6 months, and we need to save $3,000 for it. Can you help us adjust our budget to include saving for this goal while still maintaining our 10% savings rate?”
Step 8: Create Flexibility
Prompt:
“We understand budgets need to be flexible. Can you suggest how we can tweak our variable expenses or allocate leftover money if unexpected expenses arise?”
Step 9: Final Review
Prompt:
“Please provide a final summary of our budget, including total income, total expenses, savings, and remaining balance for the month. Highlight areas where we can save more or adjust if necessary.”
Example Output (For the Prompts Above):
| Category | Amount (Monthly) | Amount (Yearly) |
|---|---|---|
| Total Income | $6,000 | $72,000 |
| Fixed Expenses | $3,300 | $39,600 |
| Variable Expenses | $1,200 | $14,400 |
| Savings (10%) | $600 | $7,200 |
| Remaining Balance | $900 | $10,800 |
This approach ensures the couple can see their financial standing clearly while leaving room for adjustment. If you can’t get together with you partner and do this, then you will many others issues in your relationship going forward.
Cars after housing are the biggest expense, and not just the car, fuel, insurance and even parking. And it is an expense, not an investment no matter how cheap someone tells you you bought a car. And you may not need a new car, really. I know many millionaires driving old cars, or that have no cars at all. You mileage will vary.
Here we’ve painted a picture of three scenarios involving car expenses. Now, these numbers are for storytelling purposes. They’re placeholders, folks—guidelines to get you started. Here’s what they tell us:
- Scenario 1: One car with a loan or one car paid off—how much freedom can you buy with fewer debts?
- Scenario 2: Two cars, double the cost—sometimes having more feels like less when it comes to the bottom line.
- Scenario 3: Sharing a car—tight quarters but looser wallets.
Here’s the updated breakdown with your new numbers:
Updated Assumptions:
- Monthly insurance per car: $200
- Monthly fuel cost per car: $200
- Monthly maintenance per car: $100
- Car loan monthly payment: $400 per car (if applicable)
Scenario 1: One Car with a Loan vs. One Car Paid Off
- With Loan:
- Insurance: $200 × 12 = $2,400
- Fuel: $200 × 12 = $2,400
- Maintenance: $100 × 12 = $1,200
- Loan Payment: $400 × 12 = $4,800
- Total Annual Cost: $10,800
- Paid-Off Car:
- Insurance: $200 × 12 = $2,400
- Fuel: $200 × 12 = $2,400
- Maintenance: $100 × 12 = $1,200
- Loan Payment: $0
- Total Annual Cost: $6,000
- Savings (Loan vs. Paid-Off):
$10,800 – $6,000 = $4,800 saved annually
Scenario 2: Two Cars with Monthly Payments
- Car 1 Costs:
- Insurance: $200 × 12 = $2,400
- Fuel: $200 × 12 = $2,400
- Maintenance: $100 × 12 = $1,200
- Loan Payment: $400 × 12 = $4,800
- Car 1 Total Cost: $10,800
- Car 2 Costs:
- Insurance: $200 × 12 = $2,400
- Fuel: $200 × 12 = $2,400
- Maintenance: $100 × 12 = $1,200
- Loan Payment: $400 × 12 = $4,800
- Car 2 Total Cost: $10,800
- Combined Annual Cost:
$10,800 (Car 1) + $10,800 (Car 2) = $21,600
Scenario 3: One Car, Shared by Two People
- Shared Car Costs:
- Insurance: $200 × 12 = $2,400
- Fuel: $300 × 12 = $3,600 (shared usage increases fuel costs slightly)
- Maintenance: $150 × 12 = $1,800 (shared usage increases wear/tear slightly)
- Loan Payment: $400 × 12 = $4,800
- Total Annual Cost: $12,600
- Savings Compared to Two Cars:
$21,600 (two cars) – $12,600 (shared car) = $9,000 saved annually
Summary of Annual Costs and Savings
| Scenario | Annual Cost | Savings Compared to Two Cars |
|---|---|---|
| One car with a loan | $10,800 | $10,800 (vs. two cars) |
| One paid-off car | $6,000 | $15,600 (vs. two cars) |
| Two cars with monthly payments | $21,600 | $0 |
| One shared car (lower costs) | $12,600 | $9,000 |
Key Takeaways with Updated Costs:
- Scenario 1: Paying off a car loan saves $4,800 annually compared to keeping the loan.
- Scenario 2: Owning two cars costs $21,600 annually, making it the most expensive option.
- Scenario 3: Sharing one car saves $9,000 annually compared to owning two cars, even with increased shared usage costs.
The numbers don’t tell your story yet. That part’s up to you. Plug in your own expenses—what you pay for insurance, gas, maintenance, and loans. Build a budget that matches your life, not someone else’s.
Taming the Budget Beast
A plan doesn’t have to be perfect to work. In fact, the best plans often start out wrong and get better over time. But no plan at all? That’s a guaranteed trip to nowhere, and quick. Start with something—anything. If you’re honest with yourself and willing to adjust along the way, you’ll find your footing.
The secret to getting ahead is getting started and when it comes to your money, every tweak to your plan steers you closer to where you want to be. Don’t worry about making it perfect; worry about making it yours. Now, grab that pencil, lay out your expenses, and start rowing—there’s smoother waters ahead.
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