Overview:
Why Budget?
Everyone should create and maintain a budget so that you know where your money is coming from and going to. Even if you do not have a very complicated finacial lifestyle a budget will help you to understand and make better decisions about your money.
What is a budget?
A budget is a system of estimating and tracking your income and expenses, and recording the results. You can do this a number of ways such as on a calendar, using envelopes, or just keeping track of it in your head. You should consider your expenses from a yearly, monthly and daily perspective. Some expenses only occur once a year and are easily forgotten about until the bill comes in the mail. i.e. Excise tax on your car.
Key Points:
A couple of key points to remember when setting up and maintaining a budget are:
- A budget is not supposed to restrict your spending. It is supposed to make sure you have the money you want to spend on the things you want, when you want.
- A budget is only as good as the data you keep. Remember the saying - Garbage in Garbage out. Try and be realistic when setting up your estimates of expenses and income.
- Keep up with the daily tracking of what you are spending. Enter your expenditures as soon as possible into the spreadsheet. Keeping receipts can help.
- Don't worry about things balancing to the penny, just get close and the budget will work.
- Review your budget at least every month and make adjustments to the estimated amounts as applicable.
- During review of your budget look for trends and patterns in your spending.
- If you are looking to reduce your spending in some areas check the category and the frequency of purchases. This can help you identify where a bulk purchase can reduce what your going to spend.
- Maybe you see that you are purchasing diapers in small quanities every couple of days, so it may make sense to (go to the discount store once a month/bring a senior for discount day/use a coupon) and purchase a large quantity all you need for the month all at once.
This Budget Spreadsheet Template helps you to track expenses on a daily basis, for each month of the year. Use it to spot trends in your income and expenses. Act on these trends to reduce you expenses or increase your income.
