How To Maintain Your Simple Budget

Congratulations on creating your very own simple budget! Now you get to enjoy the very fun part of living with a budget. If you have a good income and all of your expenses and savings are provided for easily, that is fantastic! You may feel tempted to put the budget away and not worry about it anymore. Don't! With the dreaded possibility of identity theft and silly mess-ups at the bank, you need to keep track of your money coming in and going out. A simple budget is a great tool to help you do that. If, on the other hand, you realized after creating your simple budget, that your finances are a little tighter than you thought, then you are in the same boat as many people nowadays. It's time to buck up and use your budget. 

The first step in putting your budget to use is to track what you actually spend and try to stay within your budget. If you have online access to your bank account and credit cards, this process will be pretty simple. Just look up your expenses and insert them into the appropriate category. If you don't have online access, I recommend you get it. You may be able to keep receipts, and if you're alone, you can do that. But it is very difficult to get your entire family to keep each receipt. Just don't wait until you get your bank and credit card statements in the mail before inserting your expenses. It is much easier to stay within your budget if you can watch your spending as the month is progressing. Maintaining a budget is very forward-thinking. Wouldn't you rather say, "we don't have the money to buy that at this time" than "why did we spend so much for that?" Well, maybe not. But the whole reason you created a budget is to be more responsible with your money. 

I recommend setting aside a time once a week to insert your expenses into your spreadsheet budget. The way I do this is in Column C, I will insert each paycheck into the cell corresponding to the income category and each expense into the cell corresponding to the expense category. I just add them together as I go. For example, say I went to the grocery store twice last week spending $65.14 and $72.78. In column C next to Groceries I will type =65.14+72.78 and press enter. Voila! This gives you the total amount you have spent in this category so far. This gets a little trickier and harder to keep track of if you have a lot of expenses in a certain category. This alone is plenty of motivation to only go to the grocery store once a week. lol. But if it's a problem for you, consider subdividing your categories (ex. make separate rows for Wal-mart and Randall's) Once you have entered your expenses for each category, then put the total at the bottom and you can calculate how much you have remaining from your total income the way you did your planned expenses. 

There are many ways you can organize your budget. Rather than adding up your expenses, you can subtract them from your budgeted amount so you can easily see how much you have remaining. You can color-code your categories. If you notice you really have trouble at the end of the month, you can split your budget month in two and have a separate budget for each paycheck if you get paid twice monthly. It doesn't really matter how your budget is organized as long as the math is correct and honest

One thing to keep in mind when working with your budget is that you have made this tool to help improve your life. Do whatever you can to make the process more enjoyable so you will actually want to use it. Use pictures, color, favorite inspirational quotations, etc. Now go have some fun with your simple budget.

 

 

How To Create A Simple Budget

If you are like most people, the downturn in our economy has forced you to take a closer look at your finances and you have realized that you need to create a budget. Living on a budget is a concept that is often thought of as difficult, tedious and even stingy. However, setting up a usable budget so you can live within your means is probably the smartest financial decision you can make. And it is fairly easy. The key to creating a successful budget is keeping it simple and honest. Sure you can go out and buy some budget software, but these are often way more complex than they need to be and it seems like they always include a whole bunch of categories that you don't need. Here are some guidelines so you can create your own personalized budget.

First, open up a spreadsheet. At the top of Column B, write down the month you are budgeting for. Then in Column A (starting in Row 2), make a list of each person with income in your household. Put the corresponding expected income for each person in Column B. There are several ways to list your income. If you want to monitor how withholdings for taxes, retirement and insurance fit into your budget, put your total income down and you can include all that stuff in your expenses. Or if you feel that you're doing okay in that area and that would make your budget way too complicated, just put down your take-home pay. Also, if your paycheck varies month to month, put down the least amount you would expect to make under normal circumstances. I also like to add a line for any Bonus money that comes in. At the bottom of the list of incomes, calculate the total income for the household. 

You know how everyone always says to pay yourself first. Well, we are going to fit that into your budget. Skip a line under your total income and write Savings in Column A and the corresponding amount you want to save in Column B. You can make this as detailed as you want. Some things you may want to include are Retirement, College Savings, Investments and some fun things to save up for like a new car or furniture. 

Now it's time for reality. Under your savings you need to list all of your monthly expenses. Start with the regular bills that you can't change very easily- mortgage, rent, utilities. Then go down the list of all your other expenses. My list includes gas, groceries, phone, cable, car insurance, medical, dog care, dining out, hobbies and incidentals. Once again, you can make this as detailed as you want. I break down the expenses I put on my credit card into each of these categories since I pay for most things with my credit card. But if you want to include a limit for your credit card expenses, feel free. Just make sure you don't count any expenses twice. Put down how much you plan on spending in each category in Column B. Be as exact and as honest as you possibly can be for your budget. Look at your last bank and credit card statements to figure out how much you normally spend. Now, put the sum of all your expenses (starting with savings) at the bottom of your list. 

Here's what makes the budget process really fun. You want your total expenses to equal your total income. So, on a new line, put Leftovers in Column A and in Column B subtract your total expenses from your total income. This number should be 0. If it's a positive number, GREAT! Just add that amount to your savings line and you are good to go. If the number is in the negatives, you need to do some trimming on your budget. Start with the frivolous stuff that you don't really need. Once you get that magic number to equal 0, congratulations! You have successfully created your own personalized budget! I'm sorry to have to tell you this, but that was the easy part. The really difficult part is staying within your budget. But more on that later. For now, give yourself a pat on the back for creating your own simple budget!

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Let's Create A Simple Budget!

So you've finally realized that you need to create a simple budget. This site will guide you through the steps you need to take to come up with your own personalized budget. If you follow the links to the right, you will find out how easy it is to keep track of your finances and keep your spending within your means. Are you ready? Let's go create a budget!