Now’s time to get to work on an actual budget. I find that creating a budget and sticking to it is like meditation it is a constant practice of bringing your attention back to what you want to focus on. And in this case reminding yourself the reason that you need to stay within the budget.
Add Budget Columns
You take your first spreadsheet listing all of your current expenditures, with notes on how to save, and create columns next to that. I usually create a column for weekly, monthly, quarterly, and yearly but if you want you can just create a column for monthly. Sometimes the ideas do not have an exact amount that will be saved, so you can implement and then determine the savings or do a guesstimate and then determine if that is accurate.
Formula to Calculate
After the monthly column which includes the budgeted amount you create another column with saved monthly which is (Monthly Spending – Monthly Budget). In an online spreadsheet this is a formula =SUM(B2-D2) Assuming that Monthly Spending is column B and Monthly Budget is column D and starts on row 2. At the bottom of all the rows enter add in the total of spending, monthly budget, and saved monthly. This will give you an idea of how close you are to your goals with the given budget changes you are going to implement or are the process of implementing. If you are not familiar with spreadsheet formulas you might want to check out a Youtube lesson. For totaling a column you could enter this formula =SUM(D2:D12) – this will add all of the cells between and including D2 to D12.
Sample
| Home | Monthly Spending | Notes on Savings | Monthly | Saved Monthly |
| Mortgage/Rent | $2,000.00 | $2,000.00 | $0.00 | |
| Home Insurance/ Renters insurance | $0.00 | Included in Mortgage | $0.00 | $0.00 |
| Real estate taxes | $0.00 | Included in Mortgage | $0.00 | $0.00 |
| House Maintenance | $300.00 | Do own internal work | $150.00 | $150.00 |
| Yard Maintenance | $200.00 | Do own lawn | $50.00 | $150.00 |
| Utilities | ||||
| Phone (Cell/Home) | $200.00 | Find better service | $75.00 | $125.00 |
| Cable/Internet | $200.00 | Remove Cable only do Internet | $100.00 | $100.00 |
| Electric | $100.00 | Use less through turning everything off. Make sure turned off items are not still using electricity | $50.00 | $50.00 |
| Water/Sewer | $100.00 | Need to research | $100.00 | $0.00 |
| Gas/Other | $100.00 | Turn heat down to 65-68 | $50.00 | $50.00 |
| Total | $3,200.00 | $2,575.00 | $625.00 |
Savings Goals
If you are able to spend less and have enough money to save, then you can also create savings goals. These are usually very specific like for college, a car, or a vacation. You would add this onto your budget spreadsheet, so that you account for how much you can afford to apply to these goals monthly. This is to ensure that these savings are not going to throw you over budget or over your earnings. If you don’t already have a rainy day fund I would definitely include that. I find that it is extremely helpful to have this monthly amount automatically pushed to a separate savings account, so I am less likely to spend it.
Monitor
Now that you have geek’d out on the spreadsheet and have all of the data entered you can fine tune it. As you begin to implement your ideas you might find you are saving less or more than you estimated and you are going to want to reflect that in the spreadsheet. This budget spreadsheet is a work in progress and you are going to want to revisit as you implement your ideas. Once everything is implemented you are going to want to compare your spending to your budget on a regular basis to ensure you are sticking to it and if anything changes it is represented in the spreadsheet. There are a variety of ways that you can monitor your budget, from cash envelopes to a weekly/monthly ledger of expenditures vs budgeted amount. There are plenty of free tutorials on YouTube for this type of activity. Pick what works best for you. I like using cash envelopes it really helps keep me on track and limit my spending.