Monthly Budget Template 2021: Top Information That Will Enhance Your Knowledge And Skills In Budgeting
Start with these six steps whether you want to make a personal budget spreadsheet or just learn more about money management.
Even if you don't use a budget spreadsheet, you'll need a means to keep track of where your money goes each month. Using a template to create a budget might help you gain control over your finances and save money for your objectives. The key is to find a method of keeping track of your finances that works for you. The instructions below will assist you in creating a budget.
Identifying the amount of money you have coming in is the first step in building a budget. Keep in mind, though, that if you think of your whole pay as what you have to spend, it's easy to overestimate what you can afford. When generating a budget spreadsheet, remember to remove your Social Security, tax, 401(k), and flexible spending account amounts. The figure you should use to create a budget is your net income, which is your ultimate take-home pay.
We've put together some ideas for handling unpredictable income if you work freelance or part-time.
Tip: If you have a skill or a passion, you might be able to supplement your income. Having a secondary source of income might also be beneficial if you lose your primary source of money.
It's a good idea to keep track of and classify your expenditures so you can see where you can cut back. This can help you figure out where you spend the most money and where you can save the most money.
To begin, make a list of all of your fixed costs. These are monthly bills such as rent or mortgage payments, utility bills, or automobile payments. Although it's doubtful that you'll be able to eliminate these, knowing how much of your monthly money they consume can be useful.
Next, make a note of all your variable costs, such as food, petrol, and entertainment, which might fluctuate from month to month. This is an area where you might be able to save money. Credit card and bank statements are ideal places to start since they itemize and classify your monthly expenses.
Tip: Keep track of your daily expenditures with whatever you have on hand, whether it's a pen and paper, an app, or your smartphone. If you have a Bank of America account, you may utilize this spending and budgeting tool.
Make a list of all the financial goals you want to achieve in the short and long term before you start sorting through the data you've collected. Short-term goals should be completed in less than a year. Long-term goals, such as retirement savings or your child's education, might take years to achieve.
Remember that your objectives don't have to be etched in stone, but determining your priorities before beginning to create a budget will assist you. For example, if you know your short-term objective is to pay off credit card debt, it may be simpler to curb spending.
Use the list of variable and fixed costs to estimate how much you'll spend in the future months. You can estimate how much money you'll need to budget based on your fixed costs. When attempting to anticipate your variable expenditures, use your previous spending habits as a reference.
You might further divide your spending into necessities and desires. If you drive to work every day, for example, fuel is almost certainly a must. A monthly music subscription, on the other hand, maybe considered a wish. When it comes to making changes, this distinction is critical.
After you've completed all of this, you'll have everything you need to finish your budget. You may start to identify where you have money leftover or where you can cut down so that you have money to put toward your objectives now that you've documented your income and spending.
The first place to look for savings is on want-to-have costs. Can you watch a movie at home instead of going to the movies? Adjust the data you've been tracking to discover how much money you can save. Evaluate your spending on necessities if you've previously modified your spending on desires. You may require internet access at home, but do you require the quickest connection available?
Finally, if the figures still don't match up, consider changing your fixed expenses. It will be far more difficult and need more discipline to do so, but a "need" may just be a "hard to part with" on closer scrutiny. Such selections have significant trade-offs, so carefully consider your options.
Tip: Small saves can build up to a significant sum of money, so don't neglect the details. You might be amazed at how much money you can save by making little changes over time.
It's crucial to evaluate your budget on a frequent basis to ensure that you're on track. You may also compare your monthly costs to those of others who have similar spending habits as you. Few aspects of your budget are fixed in stone: you might get a raise, your costs might rise, or you might have met your goal and want to establish another one. Whatever the cause, keep an eye on your budget by following the procedures outlined above.
While few individuals love budgeting, this does not make it any less necessary. If you want to make sure you pay critical expenditures and have money left over at the end of each month, you need to know how much money you make and have a strategy for where and how to spend it.
Here are some suggestions for creating your first monthly budget or revising one you currently have.
When creating a monthly budget, the first step is to figure out how much money you make each month. It's critical to ensure that the budget you create does not include spending more money than you earn, as this will result in long-term debt.
Look for regular sources of revenue when estimating your monthly income. You should include your regular wage, but you should generally remove less reliable sources of income, such as selling old items you no longer need.
Make careful use of your net income, often known as your "take-home pay," when calculating your income. After payroll deductions, this is the money you have leftover. Net income is the money you make after taxes that you may use to pay bills, buy essentials, save, and invest.
Tracking your actual spending over a few months is one of the greatest methods to get a feel of how much you should budget for. You may track and classify your spending using a variety of applications, but you can also save receipts and tally everything up yourself if you want.
Sign up for Bankrate's myMoney to classify your spending transactions, find methods to cut back, and improve your financial health if you don't want to manually track your expenditure.
You may discover that you spend more or less than you expected in certain areas when you track your expenditures. This is significant because it serves as a suitable transition into the following stage of the process.
Don't forget to budget for costs that happen once a year rather than regularly. Property taxes, auto insurance payments, doctor or veterinarian appointments, and vacation costs should all be factored into your budget. You could also wish to incorporate a component for unforeseen expenses like a vehicle or house repairs.
After you've spent some time documenting your spending, take a look at your spending history and how it relates to your financial goals.
Rent, food, and bills are all expenditures that cannot be avoided. It's simple to spend considerably more than you intend on non-essential items if you don't make an effort to keep track of your expenditures. For example, you could discover that you're spending hundreds of dollars each month on takeout or that you're overspending on internet shopping.
Building a budget isn't about restricting your spending to simply the necessities. Instead, it's about spending your funds in the most efficient way possible. Consider your financial priorities and aspirations, as well as your personal happiness. You might want to consider changing your spending habits to improve your savings or put more money into rewarding hobbies or activities after you realize how much you're spending on specific products.
You may sit down and plan your future spending once you've thought about your priorities and how they fit with your spending patterns.
It's a good idea to pay yourself first. Savings should be one of the first items on your budget, whether for an emergency fund, a new car, a down payment on a home, or other reasons. Follow Warren Buffett's advice, which states, "Do not save what is left after spending, but spend what is left after saving."
Next, examine your spending patterns to determine how they correspond to your priorities. You may use your spending history as budget guidance if your actual spending is already aligned with your aims. If you want to fully change your spending patterns, you need to start from scratch with your budget.
The 50/30/20 budget rule is a typical rule of thumb for creating a budget. According to the guideline, you should put 50% of your money toward necessities, 30% toward desires, and 20% toward savings. It's entirely up to you how you spend your money within these categories.
When it comes to budgeting, there are few hard and fast rules as long as you spend money in ways that make you happy and help you achieve your financial objectives. The only genuinely significant guideline is to save aside enough money each month to spend less than you earn. Spending more than you earn will lead to debt and hinder you from reaching financial stability in the long run.
Budgets are dynamic documents that change over time. They aren't inflexible. After you've created your budget, you should keep track of your expenditures and try to stick to your budget.
However, as time passes, you may discover that your goals and living circumstances change, or that your spending patterns diverge from those you had anticipated. Take a look at your budget every six months or once a year to evaluate how well you're keeping to it. You may make modifications to your budget to reflect changes in your spending habits and income.
Calculations, job management, and corporate cash flow analysis are all made easier using Microsoft Excel and Google Sheets. But did you realize that spreadsheets may help you manage your personal and household finances?
Forget about budgeting apps – Budgeting spreadsheets may be enhanced with inexpensive budgeting templates to make monitoring funds easier than the old-fashioned manner.
To manage your finances and save more money this year, start with Benzinga's top free or low-cost budget spreadsheets.
The Best Budget Spreadsheets:
Tiller Money – $6.58 per month
Vertex42 Spreadsheets – Free
Mint Lifestyle Spreadsheet Templates – Free
It’s Your Money! Free Editions – Free
Google Sheets Budget Template Gallery – Free
PearBudget – Free trial
It’s Your Money Deluxe Envelopes Excel System – $11.95
You Need a Budget (YNAB) – Free trial