budgeting for beginners: a step-by-step guide on how to find more money

I think I first felt the euphoria of actually having money back when I was 23, a fresh newbie straight out of college finally earning her first real paycheck.  Most of us scrape by college fueling ourselves on Ramen noodles and cheap vodka, all the while shopping for new clothes in our roommates’ closets, so having extra spending money in my bank account was an entirely new (and oh-so-wonderful) feeling.  I can remember going to the movies with my friends one night in those early phases and buying an Icee without worrying about how much it cost.  The liberation! The freedom!  It felt amazing to be able to do that. 

Unfortunately, it didn’t last very long.  I began to realize that I didn’t have as much money at the end of the month as my income should have allowed, and I had no idea how that happened.  Thus, my first real, “grown-up” budget was formed. I know, I know.  The term “budget” immediately sends off a flashing red warning sign in your head, signaling that the process will be either a) daunting, b) extremely long, or c) make you want to poke out your eyeballs.  However, this is the one step that can save you hundreds of $$$’s a month (and I’m not exaggerating there) without having to put much effort or any cash into it.  Most of us cannot change our income by leaps and bounds; thus, we have to control the other half of our money, our spending, in order to become financially responsible. 

But never fear, ladies, I have made it extremely easy for you to track what you spend.  I present to you BRITT’S BASIC BUDGET TOOL, which can be downloaded by clicking the link below.

Britt's Basic Budget Tool

So how do you use it?

First things first:  For those of you not familiar with Excel, make sure to click on the yellow "Enable Content" button on the top of the spreadsheet when you first open it up.  This file will open as a "Read-Only" document, so in order to make and save changes, be sure you use "Save As" to save it to your computer.

At the beginning of every month, you will manually key in your budget (in column I) based on your best estimate of how much you will spend for each category (Note:  Feel free to change the name of any category.  Additional rows are also available in case you would like to add your own categories).  Normally, rent, insurance, etc. don’t vary drastically month-to-month, so go ahead and plug these in every month.  That way you’ll have those categories taken care of for the entire year and will be able to see how much cash you’ll need for future “fixed” expenses.  For other categories, look at your spending history for the past 3 months to help you calculate it out.  Or just guess.  After a few months, you’ll realize if you are way off or not.

Now, as the month goes on, start populating your spending in columns A through D.  Make sure you type the phrase in the “Category” column (column C) as it appears in the Budget vs. Actual table (Column J).  Otherwise, it will not show up in your “Actual” column (column J).  As you do this, you’ll be able to see how much you have left to spend in each category.  At the end of the month, you’ll have a full picture of where your money is going and what areas you need to work on.  Voila! Easy as pie.  Although pie isn’t easy.  So easy as store bought cookies.

I’ve also included a tab (labeled “Annual Budget”) that sums up all of the budgeted and actual numbers you include on the individual month tabs.  This will give you your YTD total, which is helpful in knowing how you’re doing on a yearly basis.

There you have it:  you no longer have an excuse to not be doing this.  If you have any questions about the budget template or budgeting in general, feel free to ask away.  And remember, your budget will help you control your money instead of having your money control you.  Nothing will make you feel more empowered.

Note:  I’ve included an example tab to illustrate how the monthly tabs work.  Once you get the hang of it (and for you Excel pros, you may not need it at all), feel free to delete it.

free budget template