One of the most common new years resolutions is to implement and stick to a budget. Doing your finances can be as fun as a dentist visit…. or as exciting as a successful first date depending on how you approach it. The biggest sticking point for many is getting started, so I’ve done a lot of the heavy lifting for you. Grab your free budget template in the yellow box below and keep reading!
With this free budget template, you do not need to start from scratch, simply add those item lines and boom! You’re doing it, doing it, and doing it well (LL Cool J style)
What is budgeting?
Simply put, budgeting is keeping track of how much money is coming in, how much money is going out, and what you do with the money that is left over. There are more in-depth posts on how to create a budget, although I’ve given the basic “lay of the land” below so you can have a mini tutorial and the budget template handy in one post.
Why do I even need a budget template?
Your budget needs to live on paper (or in a computer doc or in an app) or just live somewhere, which is why I provide this free budget template so you guys can print it out and have it at your fingertips.
Getting Started with Your Budget Template
Let me just say this: you need a budget.
Why? Because every dollar needs an intention, a goal. There’s also the whole “living within your means” and “not spending more money than you have” thing that budgets help with. Below I’m going to show you how to build a budget and then how to use the budget template to track your money on a monthly basis.
Building a Budget – Step 1 – Track Your Spending
This is always going to be your first step in creating a budget, no matter what age you are. After all, you don’t want to budget $30 for groceries when you’ve been spending $130 each month.
Track your money for an entire month, or go back and look at the previous month’s transactions in your online banking platform.
Tracking your spending helps you to see where your money is typically going, so you can then turn around and decide where it should be going in your budget.
Step 2 – List Out Your Fixed Expenses (a.k.a. bills you have to pay to live your life)
This should be super easy.
- Do you pay rent every month?
- Have a Netflix subscription?
- Power bill payment?
Your next step should be making a note of every monthly expense you have, along with their due dates and how you pay them. These are bills you must pay each and every month. Don’t include things like your ipsy box or Starbucks habit as this comes from a separate line item in your budget.
Now once you have an idea of your monthly spending and the total amount for your bills each month, it’s time to capture the numbers.
#Step 3 – Capture the numbers
For beginners, I always like to recommend the 50-30-20 budget method (50% of take home pay to bills, 30% to debt and savings, 20% to fun money). The clear, firm guidelines of this budgeting method make a lot of sense, so I built my printable budget template around this method.
A great way to get started is to think of it like a math formula:
Income – Fixed Expenses (rent) – Debt Repayment/Savings = Leftover “Play” Money
Then take what you learned about your spending habits from your tracking. Are you constantly spending hundreds on food each month, but not buying clothes on the reg? That’s a sign that you should give yourself more money for food than clothing.
The trick is to allow yourself to have fun, just as long as you’re sticking to your goals. Slot in the amount you feel you should spend in each category into your budget template printable.
Once you've added all your numbers in, track how much you spend in each category in the “actual” column. Subtract the “actual” from the budgeted to get the difference. The ideal is to have $0 in the “difference” column, or even a little money left over to put extra into savings or debt repayment.
Common Budget Template FAQs
What if I don’t think the 50-30-20 method is the best for me?
You might be wary about using a budget template because your finances are more spontaneous. However, there are several types of budgeting systems (complete with the proper template) that work around different lifestyles. There's no one size fits all when it comes to budgets because no two lifestyles are the same.
Here are some common ones:
- Zero sum budget– The money you bring in and the money you spend or save each month is the same, so you are left with $0 at the end of the month. (Here is an example of zero sum budget template.)
- General Monthly Budget: This budget requires you to commit to how much you will spend in each category at the beginning of the month. Throughout the month, you'll limit yourself to the money you've put aside for anything you could need during that time. (Here are four budgeting examples from other bloggers that I really like)
- Snowball Budget: For those of you who have several debts to pay off, this is a great system to use. After you've paid for your necessities, use whatever money is leftover to pay off your debts. As you pay off one debt, you can then apply it to the next debt until you are debt free. (Here is a great snowball budget template.)
And if it turns out that the system doesn't work for you, there's nothing to say that you have to keep using it! There are so many different systems out there that you could try a new one every month and keep going for years.
What if I can’t stick to the numbers in my budget template?
I think it’s really important to include some tips for following your budget because it can be really tough at first.
I remember when I made my first budget I felt like a genius, like a personal finance guru….until I started going over my limits.
….Because even though I had a new budget, I didn’t really change the way I was spending. Which is why you should always try to work with your budget rather than against it. You’re the one dictating the terms – know thyself – and set yourself up for success.
First, Set Attainable Goals
Just because you have a budget doesn’t mean that you’re in the financial clear. If you aren’t sticking to your budget, it might be a sign that either your target spending amounts aren’t correct or that you aren’t paying attention to your spending. Both can lead to a total budget implosion, so make sure that you set goals that you can achieve so that you don’t get discouraged. Get our guide on setting your first money goals here.
Second, open a separate savings account
Seriously, every little bit helps : birthday money from grandma, your tax refund. Get in the habit of saving at a regular interval – even if it's just 1-2 times each year. Even if you're kicking booty with your budget, it won't matter unless you're saving money for emergencies.
Try adjusting your mindset
If you have the money mentality that your finances are a buzzkill, doing a budget each month will feel like you're doing jail time. However, when used properly, a budget template can actually help you enjoy your life better. Here’s why:
- When you know how much money you have and where it goes every week, you'll be better equipped to save money and use it for things you want to do.
- Sticking to your budget will also help you meet those important savings goals so you can actually increase your wealth and net worth.
- Have you ever been one of those people who can't go and hang out with their friends because you don't have money? Or worse still, have you had to mooch off of a friend because you didn't have enough to pay to see the latest blockbuster? When you have a method to your money, you won't always look like the broke friend everyone has to take pity on.
Ask, “What Motivates Me?”
One of the best things you can do when you decide to implement a budget is figuring out why you are doing so. When you know why you want to get control of your finances, you can use that reason to motivate yourself to stick to it when it gets hard.
Even if you have the best intentions, and have been good about sticking to rules, keeping a budget all of the time is hard, at least for most people.
Life happens, and unexpected expenses will come up. Remember your reason for controlling your finances, and these situations will be easier to deal with.
Remember: Just Get Started with Your Budget Template, Then Refine
Sticking to your budget can be hard at first. It can also be discouraging when you come in over on a consistent basis. That’s why I recommend keeping a loose budget at first and refining it as time goes by and you improve at hitting your numbers. And trust me, once it happens, you’ll become addicted to sticking to your budget. Nothing feels better than coming in under budget, except coming in under budget EVERY. SINGLE. MONTH.
Start off with my free budget template and once you feel the urge to progress in your financial journey and drop some bones on your finance game then go for the premium items, like the full set of worksheets and spreadsheets in my Financial Best Life Starter Set.
Honestly, though, you could use the free budget template for the rest of your life and not miss a beat. Enjoy!
*this post originally published in December 2016. It has been updated in January 2019. Kevyn Bowling and Torie Winkler helped contribute to this article.