I am actually excited about Budget Day. At the end of each month I find a free evening when I can sit down with my Spendee app, bank accounts, personal Excel spreadsheet and a big ol’ glass of wine, to reconcile that month’s budget and make a budget for the upcoming month. Sounds fun, eh?
Okay, I’ll admit it can be a little scary. I used to think that budgeting would only show me lack, only make me aware of how little I have (in financial terms). I thought, there are all these things I want and need, and this will show me that I cannot have them. Once I bit the bullet and really committed to doing a monthly budget, I realized that it has the opposite effect. It is actually pretty reassuring. In fact, I find the whole process calming.
I do what is called a Zero Sum Budget. That means I calculate, to the best of my ability, what my income will be for the month ahead, and then I account for every penny in my budget. I know where every cent should be going. In order to do this, it’s important to know what your concrete expenses are. These are the expenses that don’t waver, such as rent and utilities. Put your money there first. Then you can spread what remains over the incidentals. It can be helpful to look at your previous months’ spending to see where your money goes. If you spend a certain amount every month on gas, you can work off that number in your budget. This will also help you to pinpoint any areas in which you overspend.
It’s very useful to use a template. Some people love Mint.com or other online budgeting services. I made an Excel spreadsheet based on Dave Ramsey’s budget template, which I am attaching here–feel free to download, personalize and test it out yourself! I’ve included basic instructions and inserted comments where you might like to make changes. I like Excel because I can manipulate the data any way I want and I can make updates each month based on what I’ve learned. I can also make lists and leave notes for myself, as you can see in my examples.
Budgeting has helped me a lot both mentally and financially. There are a lot of things I’m still working on. If you download my budget template, you may notice that I tend to overspend on certain categories (food, for instance), and that I’m not great at saving. I’ll delve deeper into my issues as I work on ways to improve. Until then, happy budgeting!
Have any questions about my template, my journey or budgeting in general? Ask away in the comments section!