Introduction to the Budget Template:

Managing your budget is a vital part of having healthy finances. Understanding where you are overspending and working to combat that can free up cash to be spent or saved for more important purposes.

This budget template is designed to help you identify your monthly targets and to lead into the daily budget template which helps you stick to your targets day by day.

This video below shows a typical use case for budgeting. This is someone who has decided they need to budget and have been testing out different processes to keep track of it. 

Were this video from 2016 rather than 2012, she could be using Process Street to manage her household instead. 

Household Budgets - OrganizedLifeTV

Decide on your goal

An important part of making a budget is knowing why you're making it. This allows you to determine your target, which will inform how you structure your budget and how much you tighten your belt. 

Think about why you are budgeting and determine a target amount. Also determine the time period, if applicable, over which you need to free up the funds required. 

Use the form fields below to record these targets.

Are you budgeting to survive? Maybe you're struggling to make certain payments or find that you keep running short at the end of the month.

Are you budgeting to make a special purchase? Perhaps you want to buy a car or a new television - a large purchase which you couldn't normally afford. This gives you a clear target for how much you need to save.

Are you budgeting to create space to begin saving? You could be looking to make a large purchase, such as a house. Or you could be planning for retirement or sending your children to college. This gives you a broader target where you can determine either the target amount you want to spend or can determine the quality of life you want to have and to save any extra.

Evaluate how much money you have

Firstly, determine how much capital you currently possess. Maybe you have multiple accounts or valuable investments?

Use the subchecklist below to check you have identified different sources of existing capital.

  • 1
    Current account
  • 2
    Other checking accounts
  • 3
    Saving accounts
  • 4
    Investment accounts
  • 5
    Stock portfolio
  • 6
    Property portfolio

It's useful to know what the interest rates for these are, plus any expenses which may be associated with them. 

You can also use this knowledge to calculate your net worth.

Use the form field below to record your total capital.

Identify your sources of income

If you are a salaried employee with one income stream this should be fairly easy. 

However, it can become more difficult if you have variable hours or temporary contracts. It can also be more complicated if you are a business owner.

Record in the form field below the different sources of income you have.

Calculate your monthly income

Work out how much money you receive from each of those sources and try to quantify your monthly income. 

This can be difficult if your income differs substantially on a monthly basis. For temporary work or variable hours you can take the previous 6-12 months and average the monthly income

However, if you know you have this discrepancy in your monthly income you should factor that gap into your budget as a buffer to make sure you don't go over during dry months.

Record your total monthly income below.

Quantify your total debt

Identify and review all your sources of debt. Include the expected accrued interest payments, if applicable.

Understanding this figure will help you to determine how to keep up payments and possibly how to reduce that debt by paying it off faster.

Record your total debt below.

Work out how much debt you pay off monthly

Review your previous debt payments to understand how much debt you are currently paying off on a monthly basis. 

This helps you understand your outgoings and allows you to manage your debt more effectively. 

Use the form field to record this information.

Determine your net worth

The simple formula for calculating your net worth is to subtract your liabilities from your assets

You can do a more complicated calculation by valuing other belongings and items which may hold asset value. However, for the purposes of this budget, we can simply subtract total debt from total capital to give us a guideline figure. 

Record your net worth below.

Don't fret if your net worth is lower than you hoped, or even in the negative. This doesn't necessarily mean you are in a bad financial situation. 

A well-structured budget along with a debt management plan can help secure a prosperous future for you and your family regardless of net worth. 

Identify your monthly payments

In this section, we can look at payments which don't count as debt but are recurring outgoings. 

Tick off the items on the subchecklist to determine whether you've checked the value of each one. Record this information in an itemized manner. 

  • 1
    Rent
  • 2
    Insurance
  • 3
    Vehicle costs
  • 4
    Bills and utilities
  • 5
    Entertainment costs - cable television, netflix, magazine subscriptions.
  • 6
    Phone bills
  • 7
    Child care
  • 8
    Education

Record the total value of this below.

Calculate your average monthly spend

In this section, record the average monthly spend on day to day living

Include weekly shops, entertainment and socialising, public transport, shopping for clothes and other consumer items. 

Record the total below.

Enter into a database or personal accounting software

You can use a simple excel database to record this budget information - there are lots of templates online to help you structure your sheet. Or you can use accounting software like Quickbooks, Mint, or others, depending on your particular needs.

Review the bottom line

You need to know how you are currently performing financially. This figure, which should be your total income less total outgoings, tells you your current financial health. 

Measure this figure against the target you set at the beginning of the process to work out how much you are going to have to cut back in order to reach your goals.

Adjust outgoings to improve your financial outlook

For an initial task, make a copy of your budget in your spreadsheet and go through your list of outgoings to take out all non-essential spending

Then see what happens to your bottom line. Does this take you over your target or are you still under? This informs you of how strict or lenient you can make your budget.  

Record your variance below.

Create three variations

Create a series of different spending scenarios. 

This allows you to create different priorities for what you're going to reduce. Plus, this helps you focus on creating realistic projections. One common difficulty of budgeting is getting carried away in the planning stage with how little you can live on. 

By creating different scenarios, you can hit your target while also making sure you're not limiting your lifestyle unrealistically. 

Creating a reasonable and realistic budget is the first step to sticking to your budget.

Work out how the money made available helps your goal

If you are looking to save a particular amount, you can work out how much you can save and for how long. Simple.

If you are trying to use your budget to help manage debt, you can review how much money you can save per month and then measure that against your existing debt repayments. This may mean you can pay off more each month and reduce your total accumulated interest. 

Break the budget down into days

If you break your budget down into individual days, or a rough target for days, then you can measure how you're adhering to your budget as you go. 

You could set a daily limit on spending. Or you could budget for x amount for luxury goods per month and create daily limits separate from that. 

If you're really committed, you can plan out each week's food and activities in advance and allocate your spending accordingly. 

Launch the daily checklist

To help you stick to these targets, we've made a daily budget template which you run every day.

This template allows you to very simply measure your daily totals and variance while providing sections for notes so you can know how and why you spent over or under. 

Click this run link to launch the daily schedule checklist.

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