Absolutely everyone should have a personal budget. In my opinion it’s the most important part about personal finances. If you Google ‘Personal Budget’ you’ll find some great templates but some of them look so complicated – it can be overwhelming.
Creating a personal budget does not have to be difficult. Keep it simple.
We’ve used the same personal budget spreadsheet for the past 10+ years and it’s worked for us. Like I said before, just keep it simple. Want to see what we do? Get a copy of our Personal Finances Spreadsheet. We added a few things on there as examples for you.
Tab 1: Budget
Description Column – Make a list of all the different financial responsibilities you have. They may look similar to ours. We have car insurance, cell phone, credit card 1, credit card 2, gas and electric, life insurance for Simone and I, loan 1, loan 2, mortgage, tv, internet, phone and water. You can include other items such as food, gas for the car, etc. if that makes sense for your budget.
Monthly Column – This column shows how much you expect to pay each month. This number may change month to month.
Balance Column – Keep a running balance of each financial responsibility. It’s great to know where you stand with your finances as a whole.
Last Paid Column – Each time you pay a bill, record the date the bill was paid.
Next Due Date Column – Each time you pay a bill, record the date the next bill is due. We also sort by this column each time we pay a bill. That way the spreadsheet is always organized with the next bill due on top.
Tab 2: Checking Account
When you open a checking account with a bank, they usually provide you with a check register. These allow you to keep a log of all your debits and credits with your account. At the end of each statement period, some people look at their checking account register to compare it against the bank’s statement. In my opinion, this is good practice, but it shouldn’t be done just once a month.
We basically took the same format of the bank’s check register and put it on an excel spreadsheet. You have a column for check #, date, description, debit, credit and balance. Each time you take money out of your account or add money into your account, you should update your spreadsheet. This allows you to always know how much money you have.
An additional step we take is to balance our excel spreadsheet against the digital version of our account. So, we log into our account on our bank’s website and balance our spreadsheet. When an item on our bank’s website matches to our spreadsheet, we bold that item on our spreadsheet to know that item actually hit our account and matches to the bank. Make sense?
Something important to remember is when you write physical checks…you will add it to your check register right away so you don’t spend that money on accident and then bounce a check. After the check has been cashed and it appears on your bank statement, then you will bold it on your check register.
We update our check register as often as necessary. Sometimes that is daily and sometimes every few days. We balance our excel spreadsheet against the bank’s website at the same time.
Like we said before, we’ve used the same personal budget spreadsheet for the past 10+ years and it’s worked for us. Just keep it simple. Get a copy of our Personal Finances Spreadsheet and personalize it to your needs today.