Budgeting your money need not consume a lot of time. Once you set up a worksheet, you can get a grip on all your income and outgo. In addition, the best budget worksheets give you the space to set aside money for short-term as well as long-term financial goals, allowing you to make rent while planning for your dream purchase, be it a house or a trip around the world.
Before you get out the calculator and the pay stubs, make sure your budgeting process suits your style. There are those rare types who love an exact dollar amount to meet or beat every month, but many others want room to breathe and be spontaneous. Choose a budget worksheet that allows for categories that suit your lifestyle, such as vacation planning, taking a sabbatical, volunteering or giving to charity. On almost any budget worksheet, you can amortize yearly expenses or set aside separate savings categories to pay for life goals.
You can dutifully list your cash expenses, bills, taxes and other expenses on a worksheet or in a notebook and compare them to your monthly take-home pay, interest and other income, or you can set up an online budget worksheet. Free online budget guides, like the ones found at Mint.com, not only track income and expenses but allow you to create charts and graphs identifying your spending habits and trends.
Adjust and Accommodate
You budget and budget worksheet should reflect the fact that your income and expenses are fluid and dependent upon your current situation. Consult with your budget after a month or so to determine if you have set realistic limits. You may find you can relax the no-lattes rule to accommodate the occasional Americano, or that you need to switch the weekly sushi bar visit to a taqueria. The Zen Habits website recommends rounding your expense totals upward to allow room for error.
Your budgeting process and worksheet should account for the categories that often break budgets, namely emergency expenses, savings, retirement and spending splurges. The Zen Habits guide recommends following the popular pay-yourself-first strategy, in which you dedicate a monthly sum of up to 30 percent of your monthly take-home pay to your savings, retirement and emergency funds. Plan on 60 percent covering all household expenses and set aside 10 percent as fun money to spend without guilt.
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