Budget plan spreadsheet. The words alone have such an awful sound. Boring! And then you think what those words might mean for your life — like setting up “limits” to your spending? Ugh!! Nothing there to get excited about either. In fact, “budget plan” sounds like a real nuisance.
But what if I tell you those “limits” can eventually help buy you freedom? And the ability to buy things you really want down the road. Or help you retire one day without relying on cat food lunches. Or simply help make it possible for you to be able to sleep late without credit vampires waking you up.
Why a budget plan might be a good thing
I’m guessing you already have some idea of why you might want to create a budget plan for yourself. Maybe you don’t have any savings. Or maybe you see everyone else around you with a lot more savings. And you want to do that for yourself.
Perhaps you’re dreaming of a house some day and want to be able to truly afford it. And you don’t want to be swamped by debt while trying to live the good life. Or maybe you simply worry that you’re spending is out of control. And you can’t imagine what being in control again might even look like.
So a budget — our new best friend — might be exactly what’s needed. First, it helps you get a handle on what you’re really doing with your money over time. But also the things you learn can help you develop new habits that become second nature to you.
How to create your budget plan spreadsheet
If this is the first time you’re trying to put together a personal budget, I’d suggest taking it slowly. Creating a budget can feel a bit overwhelming. Dealing with spreadsheets and numbers and … ugh … lots of little details is tough enough. But you’re also forcing yourself to look honestly at the way you live your life. It can be a real eye-opener!
So where do you start? Ideally it’s good to give yourself a clear picture of the many ways your money comes and goes. That’s why a “cash flow” chart is a great place to start. You want to understand just how much money comes in (revenue side) and exactly how money goes out (expense side). And the timing of when all this happens.
The article you’re reading now is about working with a budget plan spreadsheet. But to start things rolling, you might want to first create your own cash flow spreadsheet:
I know it’s a little more work. And you don’t actually have to do this formally to budget your money. But the steps are pretty much the same. And it really does help you think things through.
Plus it will help you think about where you can start to make changes (expense cuts or revenue increases). And where you can actually make room for savings — in your new budget.
Types of budget expenses
Now we get to your budget and the budget plan spreadsheet itself. Let’s start with your budget “expenses”. These are things you use your money for — and a great place to look for spending cuts to help you increase savings. Or just live within your budget, which isn’t always easy.
Traditionally budget expenses are about timing of cash flowing out. Those that you know are coming up (some monthly, some every few months or annually). And those you choose to spend on as the urge strikes, even if some choices feel like musts at the time. There are also occasionally unplanned expenses you’ll need to find money for.
In the sample budget I prepared (below), I divided expenses up into “required” and not required, to help make it easier for you to figure out where you can make adjustments. Of course, even when it comes to required (fixed) expenses, there may be some creative wiggle room.
• Required monthly or annual expenses – Things you absolutely need to find money for, like rent, food and utilities.
• Expenses you have control over – How often you eat out, movies, clothes, and even shoes. (I’m sorry, Carrie Bradshaw, but it’s true.)
• Unexpected expenses – These are things you are going to need to spend on, even though you had no idea they were coming, like medical / dental emergencies, unplanned trips, marriage, pregnancy, family emergencies, etc.
NOTE: For items that aren’t the same every month, estimate your annual spending and divide it by 12 to make it monthly. A budget like this is just a plan, not set in stone. This is meant to help you get a better picture of your spending — and use it to plan for an even better future.
Sample monthly budget plan spreadsheet
The categories used here (like the ones in the sample cash flow linked above) are only examples. You’ll have to figure out which categories you’ll need to include in your own budget by looking at your actual spending over many months. (I’d look at a whole year).
Checking accounts, credit statements, and even calendar/journal notes can help boost your memory. Think about where you’ve been and what you’ve done, but also where you are going to help you come up with a full picture of your budget categories.
NOTE: It’s ok to lump some of them together, especially later on. But maybe at first the more details you have, the easier it will be to find ways to save. This is up to you, of course. Oh … and I only used 6 months, but you’ll get the idea for how to create it for an entire year.
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So what do I do with all that?
If you’re not familiar with spreadsheet software (like Excel), my best advice is to start with a plain old piece of paper and a pen. Start jotting down things you need money for, even before checking your bank statements, etc.
For some of you, your budget plan spreadsheet will be something you can put together in a day or two. But even if it takes you a week or more (good not to overwhelm yourself), this will be a tool you’ll have for the rest of your life. So be gentle on yourself, and build it at your own pace.
And once you have it sitting in front of you, let it help you spin numbers into stories of where you can and can’t find savings. Or what things might need changing — even for instance an apartment that doesn’t suck you dry. You’ll be amazed what numbers can tell you if you let them talk!
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