Free monthly budget template for Excel and Google SheetsBY Robert Graham
Table of contents
- Personal monthly budget template
- If you’re new to budgeting
- Know your WHY
- Build your budgeting skills
- Income projection
- Understanding banks and accounts
- Expense projection
- Using tools
- Be realistic
- Set some easy early goals
- Adapt and survive
- Budget tips for veterans
- Passive barriers
- Talking to your partner
- Values and goals
- If you’re new to budgeting
- Annual budget template
- Simple budget template
- Zero based budget template
- Why try zero based budgeting?
- Why avoid zero based budgeting?
- Envelope budget template
- Is tracking transactions worthwhile?
- Student budget template
- Wedding budget template
- Christmas budget template
Personal monthly budget template
If you’re new to budgeting
Know your WHY
If you and your partner know what you’re budgeting for you’re much more likely to succeed. You should reflect on your values together. Do you want to retire on a lake? Send the kids to a certain school? Do you want debt freedom? A certain vacation? A retirement savings or lifestyle goal?
You don’t have to select a why that encompasses your whole life’s ambitions from the start. It may even evolve over time. But, when hard decisions about spending money arise, you will be more successful if you can reflect on the WHY that is important to you.
Build your budgeting skills
Budgeting, if you’ve never done it before can be daunting, because it requires some patience, some skills, and, as with all things, some experience to master. Budgeting itself is very simple, and most complex budgeting ideas or schemes are likely to be less effective for the majority of people — often because they’re complicated.
It sounds so simple, but projecting your income requires some knowledge and experience. The most complicated cases are those with variable income from changing hours, sales commissions, tips, or bonuses where specific, known monthly salaries are not a thing. In these cases you can look at 3-12 months past income numbers and pick a conservative income number to build your budget around — perhaps your 2nd or 3rd to lowest income month in the last year.
On top of projecting variable income, you need to understand what a post-tax paycheck might look like and how it can vary. Contributions to a 401(k)s, some other retirement plans, Flexible Spending accounts, and health insurance benefits are taken out before taxes. It’s important to know what your post-tax check will look like with all the deductions and taxes taken out. It’s also important to learn which of these you should be participating in! Often the most important will be health insurance (where available) and also 401(k) savings. 401(k) is especially important in the case of an employer match.
Understanding banks and accounts
Banks are generally not a lot of fun, but understanding some things about dealing with them can make a real impact on your monthly budget. First, don’t make silly mistakes like over-drafting an account. Banks take advantage of even minor mistakes here with big fees and penalties. They can even rearrange the order of transactions in time to create over-draft situations or increase the number of violating over-drafting transactions where they make more money at your expense in fees.
There are some banks that deal more fairly than others. You want a bank that doesn’t charge monthly fees and has reasonable debit card protections, free checks and checking, and low fees for mistakes. You should care a little more about ATM fee refunding — like with Charles Schwab — than higher interest rates on checking accounts. Not many people leave enough money in checking accounts for 1% to amount to more than a couple $5 ATM fees. Chasing things like interest rates on checking accounts can be one of those strategies that sounds good, but the complexity and maintenance costs rob you of real benefits.
Many expenses are simple to project. You are probably pretty sure about what your monthly mortgage payment or rent payment is going to be. Others are more complicated to project; for example: car maintenance like new tires or an oil change. What do you plan to spend on Christmas and where and when will you get the funding for that spend? Do you have big savings goals on the horizon, like a wedding, a vacation, a vehicle, or a home downpayment?
Be sure to think outside the current month when you create your budgets as much as possible. It helps to create peace of mind and removes surprises down the road. Try to look at things like car maintenance, big goals, and Christmas as monthly expenses that don’t come up each month. What did you spend on those things last year? Try to budget for that $500 expense across the 12 months of the year.
Create an emergency fund. Seriously, like tonight. Start with at least $1,000 (ASAP) to cover a significant problem and refill the coffers if you are forced to spend it. Going into debt to cover the unexpected keeps you on a hamster wheel of financial doom and gloom. If you are debt-free except the mortgage it’s time to step up your game on the emergency fund and work towards at least 3 months expenses and potentially as many as 6 or 12 months expenses. The final number depends on how much risk you are taking and how much you are comfortable taking.
You don’t have to buy or get specialized software to budget. You can use a calculator and pen and paper to great effect. These work especially well with an envelope system approach. That said, get tools that take away the drudgery of budgeting you don’t enjoy. If buying software keeps you budgeting and on track then it can be an excellent investment in your finances. If a Google spreadsheet does it for you or you don’t mind learning, then that’s great too. The important thing is to make the most of any tool you do choose and make sure the tools aren’t in your way.
Your early budgets will have problems and inconsistencies. Create a category for miscellaneous expenses to try to cover the gaps. Try to quickly correct for over-estimating income or under-estimating expenses. It’s okay to write a bad budget or to fail to meet one. You should expect to struggle with the first few budgets just like you would struggle with the first time you tried to ride a bike or a skateboard. You want to learn from each small mistake and use it to make a better budget.
Set some easy early goals
Find a short term goal you think you can easily achieve and make that part of your initial WHY. Save $100 or $1000 for a purchase or an emergency fund? Pay off an old, but small credit debt? Find an early win to get you rolling and feeling good.
Adapt and survive
You’re going to blow your budget. You might forget to save for some things that in hindsight you can’t believe you forgot. Likely you will have unexpected expenses ruin your plans. Learn to adapt your budget and roll with the punches. Maybe you can delay certain spending, use the emergency fund, or cut back on certain discretionary purchases for a while to make things work. Reflect on the WHY and keep going!
Budgeting tips for veterans
Sometimes it’s the small things that get in our way. Did you know that moving the dinner serving tray more than 6 feet from the dinner table will reduce the number of people who get seconds by 76%? A common tip to help people get to the gym is to lay out the clothes you need the night before or always keep a gym bag packed and ready. I’ve used receipts as physical tokens that help remind me to record my expenses each day or once a week — paper in my back pocket is a good reminder. What types of troubles and invisible barriers are preventing you from spending the right time and energy budgeting each month?
Talking to your partner
It’s easy to be negative or angry when your partner breaks the budget, but we all do it. Try to cool your anger and have a civil conversation about WHY you’re budgeting and how you can help meet their needs with this purchasing decision over that WHY. Maybe there’s a simple fix or maybe you need to revisit the big picture, but it’s important that you stay a team. Anger and sharp criticism creates an adversarial mentality for a conversation. Try to keep a shared vision and a collaborative tone. You’re in this together.
Getting rid of debt or saving for that killer Euro trip is so much easier if you automate it. This is like the rule of “paying yourself first” on steroids. Automate the money flowing to separate savings accounts and watch it pile up. Depending on yourself to take action each month is far less reliable and less successful. Just tip a hat to us from afar enjoying yourself somewhere in Paris, hiking the Dolomites, or touring Copenhagen.
Values and goals
Revisit what you and your partner value and wish for in life, this year, and this month with frequency. If you’re not having a conversation about money that reflects on your values and WHY at least each month, then you’re so much less likely to stay on the path AND to be on the right path for your goals. Refresh your mindset and your commitment with a monthly chat about the budget and a yearly refresh on the big picture. Celebrate your successes along the way!
The nuts and bolts of an annual budget are the same as a monthly one, but there are a few key differences. You don’t need to project expenses that occur less often than once a month. You do need to project ones that occur less than once a year. College savings, weddings, car purchases, home down-payments, and life dream vacations are all goals that you need to reference and consider in an annual budget, but may not come back up all year.
Annual income projections can have a few more things to consider and can also vary much more if you move jobs or locales. Keep some flexibility in the outlook so you can always adapt! The annual expense projections by category is a great place to compare. Do you want to spend that much on restaurants or would you rather take a vacation on the difference? Is the five star accommodation really worth it on the next trip or would you rather take an extra trip later in the year somewhere closer? Budgeting is about judging which alternatives meet your goals and values. Successful budgeting (and hence meeting financial goals) creates considerable peace of mind.
Whether you’re new to budgeting or a veteran, sometimes getting back to basics is just what the doctor ordered. You don’t need a complex budgeting scheme to succeed. You need to be consistent in making sure the dollars go where you want them to go.
Here are a few tips for simplifying:
- Set a calendar time for monthly budget meetings, daily receipt processing, and weekly check-ins
- Plan a budget buffer or flexibility from the start.
This is usually an emergency fund (big expenses) and/or a misc. category (small monthly hedge) to catch mistakes.
- Use fewer budget categories
- Pay bills online
- Use cash for most spending categories. You need a lot less record keeping to execute with cash. Take out the right amount for the month and when it’s gone — it’s gone.
- Consolidate bills to the same time. Calling around and making this happen makes bill paying and expense projection much easier.
- Have fewer accounts / banks / funds / etc. What could you consolidate?
- Helps control spending
- It helps align spending with goals and values
- Makes sure each dollar goes exactly where you want
- You learn a lot about your own spending habits
Why avoid zero based budgeting?
- It’s time expensive in transaction tracking and planning.
- It requires foresight or higher tracking discipline on variable expenses that often break the budget.
- It’s more challenging with variable income levels.
Why choose an envelope budgeting approach?
Envelope approaches are great for those new to budgeting, single folks, those looking to simplify, or those who prefer pen and paper for budgeting tools. You put the categories that you are tracking with the envelopes in cash (usually) in real envelopes and spend from the proper envelope for each expense type. Always know what’s left for a given category and transferring between categories is easy.
Digital systems can be used to implement envelope budgeting strategies. It requires that you track or automate transaction tracking, but it’s easier to sync with a partner.
Is tracking transactions worthwhile?
- Everyone should do it for 30 days at some point. It will teach you a ton about your actual spending and how it feels.
- Most people can graduate from this process or even skip it if they’re debt-free and spending is well in hand with automated savings.
- It depends on where you are in your money journey
- Envelopes make it simple to track
Budgeting in your college years can get a bad rap as a way to put a kibosh on adventurous years. That doesn’t have to be true at all. Budgeting is simply a way to maximize the money you have in line with your goals. Your future self would probably be much happier if you avoided debt and started saving, but budgets will help you succeed even if your only goal is the next big party or trip. Wouldn’t you like to have a little money around for the next adventure?
Here are some tips to get started budgeting in your student years:
- Overestimate expenses and underestimate income
- Involve your parents, spouse, or a friend
- Save and build an emergency fund of $1000 or more to cover the unexpected and any oversights in early budgeting
- Save FIRST — put aside your saved money outside your checking account immediately or automatically.
- Plan for upcoming purchases and down the road items like weddings and home purchases (or a rad trip to Southeast Asia)
- Start with small goals
- Get just a little better each week and each semester
- Budgeting is a lot like learning to snowboard — you’re not going to win the halfpipe on day one. Aim for steady improvement.
- Be realistic and honest in examining your expenses for starting a budget
- Base your first budget on real expense numbers from recent month and not on what you wish was true. Now get better a day at a time.
There’s nothing special about planning your wedding relative to planning a monthly or annual budget. Some people can’t believe what others will spend on a wedding. Some folks can’t imagine life without the biggest of big days. Just make sure you’re keeping it real and you budget each dollar. It will force you to really consider which expenses are worth it to you and make the most of what you do spend.
First, reflect on if the extras are really worth it for you and your partner. What are the big goals for your wedding day and how can you serve those goals?
The easiest way to trim the budget is to cut headcount.
The most successful Christmas budgets start in January. We’ve got some tips to make yours better no matter when you started.
- Plan beginning with last year’s spending as a baseline and this year’s new requirements (got a new child, nephew, friend, or assistant?)
- Plan for Christmas the whole year long (or as soon as you can)
- $62.50 / month is much easier than $750 in one go
- Make a gift list and understand what you’re spending on kids, friends, parents, and other obligations in context
- Track all Christmas spending as the year goes along — sometimes the best ideas and deals are in the summer.
- Kids don’t need 20 toys. We like the recommendation for a want, a need, a wear, and a read.
- Combined gifts for couples you know or even bigger toys or trips for your kids can make the most of the budget.
- Wrap more gifts and do it separately to maximize the fun of unwrapping and anticipating. Celebrate how wonderful the occasion is and how special the folks are that you plan to offer gifts!