The first thing I do when creating a budget is to start a spreadsheet similar to the below image. The way I like seeing my finances is in 2 ways: a month at a glance (in red), and a split view of what expenses need to occur in each pay period. In our case, we get paid bimonthly. The 2 views totals should always match, as it is simply 2 different ways at looking at the same data. Don't ask me why I chose mint chocolate chip colors...I think it was simply the most pleasing color on the screen :).
A few things that you will notice about my spreadsheet is that I have a section with income (with subtotal), a section for expenses (and subtotals), followed by a net of the 2 at the bottom. My expenses also are listed a certain way: I separate my fixed expenses from my variable expenses (placing fixed first), and then list them all from highest to lowest cost or order of importance. This is purely my preference, as it just became more pleasing to my eyes to see a descending order of dollar amounts.
With this budget template saved, you now have a "master template". The idea behind this, is to provide you with a starting point month after month. Without question, you know the "essentials" that need to be taken care of and when they will be taken care of. If there are any extra items (or one-offs), those belong in the month they occur in...not the "master template".
I generally create 2 months in advance from my template budget. More than this and things could get a little confusing. I say this because when you create this "master template" and begin creating months inheriting from the master template, you will begin to realize things change (i.e. new expense categories), and then you'll have to update the "master template" and all the months that inherit from it. It's much easier to stick with 1 or 2 months ahead of the game. Here is how the tabs in my spreadsheet look:
In the next post, I will go into details about how to combine data from your financial software with your budget.
0 comments:
Post a Comment