How to Start Budgeting

I found the best budgeting Excel spreadsheet…

It doesn’t matter what stage of life you are in, you can start budgeting at any time.

As long as you have a stream of revenue coming in and purchases to be made, then it is time to put your budget to work.

After I got my first paycheck at my so-called “big boy” job is when I got serious about budgeting. Finally, a fairly consistent income. I did all kinds of research to find the best way to budget as well as how to budget. I would say I am an above average Microsoft Excel user and I started to make my own spreadsheets until I stumbled across an Excel spreadsheet that far exceeded all other spreadsheets I had come across. Simple Planning is the name of the site that makes the budget planner and it can be found at.

http://www.simpleplanning.net

I would consider this spreadsheet cheap to purchase and a total lifesaver for anyone who is ready to track all of their expenses down to the last penny.

Each month I sit down and list my income at the top and then all the expenses for the coming month. I want each dollar that is coming in to have a plan and place to go. Just because there is money left over after expenses are paid doesn’t mean that the dollars don’t need a game plan.

The spreadsheet makes this easy by having a “Budget by Month” sheet which allows you to add your income streams at the top and then breaks down into the expense categories which are all editable. On the right side of the spreadsheet, there is a budget summary for the month which totals up the income/spending and gives you the net for the month selected. A pie graph also shows the spending summary by the categories you select, so you can keep track of what kind of expenses your money is going too. Finally, there is a bar graph showing you the spending by month for the whole year so you can make sure you have properly allocated the funds this month. I show an example in the image below.

Once the monthly budget is set you are ready to go on with your life and start tracking your money. Using the daily spending tab I can go to my credit/debit card statements and enter the amounts in the proper category. This keeps you extra organized if you stay on top of it. The tracking sheet adds up the categories over the course of the year and allows you to see where you need to tighten up the budget or see where you have extra funds. This will make you feel like you have gotten a raise. In the image below you will see I am in the month of February and putting in transactions into their proper spending category. All of these categories can be modified. The spreadsheet will keep totals and distribute these values to the other tracking sheets.

The comparison sheet gives you a side-by-side comparison of your budget for the month and the tracking sheet to give you an over-under on how you are doing for the categories you budgeted for and what you will need to adjust the budget for in the future. You will easily be able to see which categories you are over and under budget. The comparison values are red or green depending on if you are meeting the budget you set. On the right side, you will be able to compare your “budget by month values” vs your “daily spending”.  The “Tracking” sheet will allow you to see a comparison of each months spending for the year to help you properly adjust your budget based on previous months.

Give it about 3 months to really fine tune your budget. Don’t get discouraged if it takes some time to get used to telling your money where to go, but once it starts working there will be no going back. You will be on track to meeting financial goals and working towards building wealth.

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