Budgeting is simple and very important for those who care about keeping their finances in order. A simple spreadsheet either electronic or paper will help you analyze what you’re spending, how much you should be saving. Whether it’s for retirement or a new motorcycle, creating a budget and sticking to it can put you on the path to meeting your long and short term savings goals. Below I have listed 5 simple steps to creating a budget including an example spreadsheet that I created using a simple template.
1. Write down the minimum amount of money that you bring home each month (Salary 1)
2. If more than one income, add all incomes
3. Write down all of your monthly bills
4. Add all of your monthly bills (Total Expenses)
5. Subtract Total Income and total monthly expenses(Net Income)
If you want to be on a tight budget, this is how much you should save a month! If you don’t want such a tight budget, add a 10% – 20% buffer to your total expenses for miscellaneous spending and there you have it!
Optional: Any bills that are not monthly place in a separate category.