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These last few weeks I’ve been discussing money. If you missed it, “Let’s Talk Money” was about why we should be more open and discuss money with others and the sad financial state of most Americans’ finances. “Easy Ways to Save” was where I laid out easy money saving ideas that I practice everyday. Money is so important to living a simple, frugal life which is why these posts are soooo important. Also it’s still cold and snowy outside, so I can’t really work on any projects outside at the moment 🙁

One of the ways I learned to save money was from budgeting. The term “budget” though tends to have a bad reputation sadly. Some think that the wealthy don’t need a budget because they have so much money. Others think that those who budget are struggling financially. And then there is the common misconception that all those who budget cut out all things “fun”.

I started budgeting when we were trying to save for a downpayment on our first house. Whether or not you are trying to save money or you’ve always had enough money and are “getting by” budgeting is a good skill to have and anyone can benefit from one. Here are some common excuses and reasons why they aren’t good excuses.

1. Maybe you used to budget when you paying down some debt but now that you are debt-free you don’t think you need one. Well do you have an adequate emergency fund? If not, you should be building one. Costs always arise when we least expect it and life happens. If you’ve started spending all your money when you stopped budgeting then you might not have enough cash reserves for an emergency. Also do you have any other financial goals you’d like to accomplish?
2. If you’ve always “had enough” and don’t have a saving “problem” you might think you don’t need one. Do you have enough cash reserves on hand for an emergency? Do you want to buy something of significant cost but just haven’t been able to scrape up the last little bit of money needed to purchase it? If you are at least tracking your expenses then you might be able to save up that little bit extra needed to buy that one thing you’ve wanted. Or you’ll be able to optimize your money better. At the very least you’ll be able to catch some big changes in spending habits.
3. You might not have any financial goals right now. Again, is your emergency fund fully funded? Are you maxing out your retirement? If not, there are some goals for you. If you are debt-free and “goal-less” then these should be your top priority.
4. Maybe you don’t make a lot of money and think there’s not even enough money to “budget”. The less money you have the more crucial it is to track your spending. You’ll want to use what little resources you have wisely. Because you are spending less overall it will be easier to keep track of.
5. This last excuse is that you have enough money and don’t want to deprive yourself or get rid of the “fun” things you like to do. This one I have a real struggle with because living a simple life means focusing on the things that are important to you. Budgets are there to help you achieve your goals. If you want to retire early, travel more, learn to surf, etc., well budgets can help you set aside money to be able to do those things! Budgets aren’t always about paying off debt. You can always budget less for things that aren’t important to you and budget more for those that are.

Maybe, like many of us, you have tried budgeting but you didn’t know where to start or you became overwhelmed, frustrated and gave up. Sadly, it happens to the best of us. We as humans tend to overcomplicate things and unfortunately we are our own worst critics. But there is some good news! I’ve seen some crazy simple budget templates that are easy to follow if you have already been budgeting, but they don’t really help you get started if you are new to the idea of budgeting. I’ve also seen some complicated budgeting spreadsheets that really just overcomplicate the process and overwhelm those that are using them.

1. The good news is that budgets don’t have to be insanely complicated! You don’t need the latest technology or even need to download the latest apps to connect to all of your accounts. Actually, I think it’s more beneficial if you budget the old-fashioned way, with pen and paper! Why? Well if you automate everything you won’t really appreciate budgeting for what it is. If you aren’t physically managing your own money, especially if you’re just starting out, you might be less invested in your financial goals, blow your budget, and become frustrated when the process isn’t “working”. You can always progress to excel spreadsheets and automatic budgeting tools later. Which brings me to my next point…
2. One reason you may have wanted to automate your budget is the “time factor”. Now if you are just starting out I’m not going to lie, budgeting will take more time than if you were already budgeting. But it doesn’t take hours a day or even hours a week! Once you’ve set up your budget you can update it daily or even weekly and it only takes minutes! You budget on your time!

So, because I couldn’t find the perfect budgeting worksheets I decided to make my own! Keeping in mind all of the frustrations and reservations above, my goal was to create simple worksheets and a tutorial that will also help first-time budgeters or aspiring budgeters willing to give budgeting another go. My hope is that you’ll be less frustrated with the process and want to continue budgeting. If you’d like the free download, fill out the form below!

The first worksheet you’ll find in the packet is the “financial planner” worksheet. If you are new to budgeting or can’t think of any financial goals this worksheet will be good to prioritize what you want to do and where you want to be now, in the near future, and long-term. If there are two of you in the household this exercise might take a bit more time to complete. It is crucial that you be on the same page and agree to implementing a budget. You both will need to sit down, define your goals, and agree to a budget. Your goals may not always align and that’s ok. You may have to compromise on what you work towards first or how aggressive you pursue each of your goals.

The second worksheet you’ll find is the “Expense Tracker”. I feel like most people trying to create a budget don’t know where to begin because how can you set a budget if you don’t know how much you are spending on groceries, eating out, entertainment, etc.? It’s incredibly frustrating! So before you create a budget I think it’s important to track your spending for 1-2 months. You’ll then have a good idea how much you are spending for different things. Create some categories that you think will work well with your lifestyle. For example, our categories include student loans, car expenses, media (cable/phone), food, home expenses/utilities, and miscellaneous. For us, miscellaneous expenses include one-time expenses and our entertainment budget. You may want an entirely separate category for entertainment. If you have childcare expenses you may want to include that as a category as well. It’s entirely up to you.

I recommend keeping your receipts to help track your expenses. If you only use credit cards it can become quite difficult to track expenses as each transaction “clears” at different rates. You could become frustrated trying to “weed” through all of your transactions to capture them all, especially if you don’t log your expenses regularly. If you log your expenses daily, this might not be a problem unless your significant other has different accounts.

When we had used separate credit cards I asked my husband to save his receipts. Now that we use the same account we don’t keep receipts because we log our expenses as they happen. When we do withdraw cash (not often), we mark it as a one-time expense and then when we use it (it may take us awhile if we forget we have cash) we don’t have to worry about it since it’s already been accounted for. If you use cash often or withdraw large sums this might not work for you as you’ll never be able to track which categories you are actually spending your money in. You’d be better off accounting for the cash as you spend it to create a more accurate picture of your spending habits.

At the end of the month, add up each category’s sheet.

Next up is the evaluation worksheet. This worksheet is meant to help you analyze your spending habits to create a healthy budget. Were you surprised by the amount of money you spent in some categories? Many of you will be. Did you save any money?

The fourth question on the evaluation sheet is for those who are looking to save money and/or want to at least decrease some of their expenditures. Remember those goals we created in “financial planning”? This is where our goals should at the forefront of our mind. Do you want to spend less on takeout? Can you find cheaper insurance? Should you refinance your house, student loans, or cut cable? Whatever opportunities you find to decrease spending, write out your strategies to decrease those costs.

If you really don’t believe you need to decrease your spending or feel you need to save anymore, then you can simply skip this step. At least you now know how much you’ll need to designate to each category for budgeting purposes. If your spending habits change significantly you’ll take notice.

Now that you’ve recognized the different areas that need work and have created a strategy, it’s time to designate a certain amount of money to each category you’ve created. If you’ve decided to cut back on some expenses either by a percentage or “x” amount of dollars subtract that out from your previous worksheet for each category and that’ll be your “goal” budget for that category.

Note: DO NOT forget to budget money for your life’s priorities. If you completely eliminate spending for your hobbies and interests then you’ll be bitter towards budgeting and less likely to stick to it. My hope is that you’ll continue to use it so you can all reach your goals!

If you can’t create any cost savings, then it might be time to evaluate your sources of income. Are you due for a promotion or a raise? Are there better job opportunities elsewhere? Can you create a profitable side hustle?

On the “monthly budget” worksheet you’ll keep a sheet again for each category and write in your “budgeted” amount for that category. As you spend money, write in what you bought or where you spent the money, the amount you spent, the balance “remaining” (where the amount spent is deducted from the budgeted amount and from previous balances going forth, etc.) and any notes you’d like to record for that purchase. At the bottom you can record the amount you spent for that category and your remaining balance leftover – aka savings.

Lastly is the “monthly wrap-up”. This is where you will evaluate how you did. You’ll record your income earned for the month as well as the beginning balance of all of your checking and savings accounts. You’ll also record the amount you budgeted for and your actual expenditures for each category. Then tally those numbers up!!!

Your “expected savings” is going to equal your total budgeted amount subtracted from your income. Your “projected balance” will equal your income added to your expected savings. Your “actual savings” will equal the total of your actual expenditures subtracted from your income. Your “actual balance” will equal your income added to your actual savings. Whether or not you actually stick to your budget 100% hopefully you’ll end the month with more in your pocket than you started out with! Everyone has to start somewhere!

The second worksheet of the “monthly wrap-up” is where you’ll record what went well and what didn’t. It’s meant to help you stay focused and working towards your goals that you established in the first worksheet.

While the initial setup of this budget will take some time, the financial planner will only need to be completed once or as needed as your goals change. And they will! It’s life! The expense tracker and evaluation will also only need to be completed once, as you’ll be able to modify your budget to adjust for any changes expected. So once you’ve established your budget, all you’ll need to do is input your beginning monthly account balances in your monthly wrap-up and record your income and expenses for the month. If you keep your budget worksheets easily accessible to you and/or your family (in the kitchen, office, or wherever you do bills), you’ll be able and willing to record your purchases as you make them. At the end of the month take a few minutes to tally everything up and see how you did!

Note: Budgets are fluid! Expenses do arise, so don’t be discouraged if you’ve exceeded the budget in a certain category for that month. Chances are that you’ll have saved money in another category that will help cover the cost of that “budget blowing” item. Just because you’ve exceeded your budgeted amount in one category does not mean that you won’t save money for that month! There will be times you may even need to tweak some budgets (whether up or down) depending upon your expenses, etc. AND, there may even come a time when you get the hang of this thing and feel comfortable challenging yourself to save even more.

Let me know what you think of the tool! I’m always open to feedback. I really wanted this budget to help first time budgeters get started and also help those who have tried and failed. For those who budget, what do you to stay motivated? For those who have given up on budgeting, what was the reason?