If you find yourself in a constant cycle of trying to catch up with your bills or you have a financial goal that you want to reach within a certain period of time, work on a budget plan. This plan lists your financial situation at a glance. A spreadsheet is an ideal format to create your budget plan because it does automatic calculations and you can update it often. You can use any spreadsheet program you feel comfortable with, such as Microsoft Excel or Open Office Calc.
A common spreadsheet is made up of multiple sections called worksheets. Within each worksheet are the cells (intersections of columns and rows) where you can add your budget data. When creating your budget plan, name one worksheet "Income and Expenses," another "Goals" and a third "Needs." The worksheets represent three important elements of a complete and successful budget plan.
Income and Expenses
The first worksheet should list monthly take-home income and expenses, including all expenditures, such as rent, entertainment, gas, utilities and debt accounts. The total, deducted from monthly income, leaves an important and instructive figure: the amount of take-home pay you have left over at the end of a month after paying your bills. If the number is negative, the expenses list will require cuts.
The "Goals" worksheet should contain every finance-related accomplishment you want to make within the year. These might include saving $5,000 to buy a car, saving $300 per month for an emergency fund and saving $50 per month for a college account. Enter each goal, the amount needed and the deadline by which you want to achieve each goal. Place them in order of priority. You can then start putting your extra money (determined on your "Income and Expenses" worksheet) toward each of those goals. Update the list every year.
More immediate needs go into a separate worksheet. Look at this sheet as more of a "to-do" list that you'll reference regularly. Include everyday items that you need to buy or pay for within the month but that aren't included in your monthly budget. For example if you have to pay your car's registration fees that month or get your car tires changes, add these costs here. Allocate some of your extra funds from the "Income and Expenses" worksheet to these immediate needs.
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