Is budgeting something that scares you? Is it something you avoid altogether? Do you feel like you spend way too much time balancing a checkbook or trying to figure out if you will have enough money to make it to the next paycheck?
Well this post is about creating a solution to those problems. It is a post about budgeting made simple. The first step to conquering budgeting is knowing what you are working with. If you are trying to budget each month without knowing the exact breakdown between your income versus your non-discretionary expenses, you are likely to miss the mark often.
So in this post we are going to tackle that first step, knowing what you are working with. The link in this post is for a free download to an automated budget where you can input your information and use each month. Below is a sample picture and in this post I will explain how to use the download. Note that this is a fictitious budget to use for an example. I tried to use an average number for expenses but they may vary greatly from your actual numbers.
So, let’s just jump into it. The first thing to note is that cells B6, D4, D6, B24, D24, B26, and D26 are formulas and should not need to be changed. I begin each month’s budget by inputting the date of scheduled paychecks (B2 and D2) as well as my current checking account balance in cell B4. Cells B5 and D5 are listed as projected income. This is where you will enter the amount of your future paychecks. If this is not the same each month and you are not sure then just enter a projected amount and you can change it to the exact amount when you receive it.
Now you should have your income portion complete. The total income amounts should adjust automatically as well as the current checking account number in cell D4. This is because the formula uses the balance from column B. If you “missed” budget and this does not accurately reflect your account balance on that day, it is a simple fix. Just input the correct amount.
The next section is the expense section. I have listed some common household expenses as well as some discretionary items. Begin by entering all of your non-discretionary items (set bills such as rent/mortgage, phone, utilities, etc). You will find these items in cells A10-A18. If you have something that I have not entered you should add it at this time as well. Click on a row number in the expense section such as row 18. When it is highlighted right click and select insert row. You can input your information and the totals will automatically reflect your update. Remember to enter the expense amount under the appropriate column (which paycheck this bill will be paid out of).
Now the fun part! Items A19-A22 are areas of your budget to play with. For example, you may typically spend $400 out of every paycheck on groceries. However, you may find new money saving ways to spend only $300 giving you an extra $100. That $100 may increase your savings or maybe just give you some cushion in miscellaneous. Each time you change your expense amounts, your total at the bottom will change so you will be able to manage what you have left over after each paycheck.
As you move through the month you can use this budget two ways. You can leave this budget set with your original information and at the end of the month compare your actual spending amounts to what you planned in the beginning. This will help you determine a realistic budget for the future. You can also use this template as a way to balance your account throughout the month.
As your bank account balance changes update the corresponding cell on your spreadsheet. For example, when you receive a paycheck deduct that amount from the prospected income line and add it to the current account balance section so that this spreadsheet most accurately reflects your checking account. Delete expense amounts as you pay them and update your account balance when necessary. Using the spreadsheet this way allows you to answer the question, Am I still going to make it by the next paycheck?
The good news? It is a free download(link below) so use as many copies as you like. Make adjustments so that it works for you. You will also notice at the bottom that I have added several tabs and labeled for each month so you can budget way in advance.
This post is about making it easier to know what you are working with each month and to plan ahead. This is the first step in preparing a successful budget. This is not a post about what I think you SHOULD save or spend. I hope this is helpful to you and if you have any questions, please comment below or email me using my contact page.
Good Luck and I can’t wait to hear from you!