Before you read this post, many of the tips and tricks assume you have downloaded the Savings Guide budget spreadsheet from here. This is a budgeting tool we created after 5+ years of experience knowing what works.
As someone well rehearsed in ways to save money, I cannot think of one thing more important to any prospective money saver than starting your very own personal budget spreadsheet.
A budget spreadsheet is quite simply the crux of how to save money. It is the catalyst for someone to identify their overall financial situation, learn what is working (and what isn’t) and in turn make life changing decisions to improve cash flow, maximise disposable cash and in turn grow savings.
The reason you need a budget spreadsheet
The answer is very simple; a budget gives you an easy to understand overview of your personal finances in an easy to understand snapshot.
Money is made unnecessarily complicated by the array of products, services, investments and tax implications that arise from financial marketing people trying to ‘simplify’ your money.
The reality is that if you want to simplify your money, you need to take control of it yourself.
The easiest way to do this is with a budget spreadsheet that you manage ongoing (either online or in Excel) – until you have that, you have zero clarity on your financial situation and no wiz-bang account or product is going to re-engage you with your money.
It’s also about having a master plan for your money
Not having a master plan for your money is like building a house without architectural drawings. The builder won’t know what to do and you will end up with a dodgy house. Having a budget spreadsheet means you have a master plan – it outlines your debts, spending, plans, next steps and more. It’s a master plan that you can always refer back to in order to keep your money going forwards even when your situation changes.
For me, I personally love being able to identify areas where I am carelessly spending my money. A budget allows me to quickly identify these money wasters – like the time I learnt I was spending over $250 a month on taxi’s due to Friday night drinks at work each week. I truthfully was not aware that my quick cab rides around the city were eating up such a significant amount of my monthly pay.
Lesson? Things that cost you very little, have a tendency to add up. A budget is the easiest way to find these kinds of things.
The critical elements of any good budget
A good budget spreadsheet should help you track the following:
- Your earnings (income summary)
- Your outgoings (expenses)
- Your debts (how much you owe and how long it will take to repay)
- Your goals (what you want to achieve and by when)
Each facet of your budget gives you deeper insights into your money.
The money you earn (also known as your ‘incoming’) is vital to track. This should register not only your regular pay cheque, but your other sources of income also.
Things like investment income from savings account, shares, term deposits and more. Perhaps you also do some side work to earn extra money? Make sure this is accounted for in your budget spreadsheet as it gives you a more holistic view of the amount of money you have to work with.
Probably the most important part of any budget plan. Listing your expenses lets you see where you are spending the majority of your money. Sometimes an expense is vital, like paying for health insurance, however often we have expenses that are not so important that can easily be cancelled in order to save money.
Use your list of expenses to try and identify patterns and behaviours that are resulting in wasted money. I call these ‘spending leaks’ – leaks because like a hole in a boat, you need to repair it to save yourself from going under.
Listing your debts within your budget spreadsheet means you cannot accidentally ‘forget’ they exist. All too often people put their heads in the sand to avoid remembering they have debts. List your debts, never forget them and use your budget to find ways to repay them faster.
Listing your goals is nearly the most important part of any good personal budget spreadsheet. You need to have the ‘end game in sight’ and always remind yourself why it is you are managing your budget and why it is you want to save money.
It’s important to have a budget spreadsheet that has stunning visuals to motivate and illustrate your actual progress.
Screenshot courtesy of Budgetspreadsheet.com.au
Saving money for nothing isn’t as motivating as say, putting money aside for a holiday or perhaps to repay debts faster (that are costing you money). Tip? Set goals. Big goals.
Be clear in what you hope to achieve with your budget
To elaborate on goals a little further, you really need to be clear with what you want to achieve by creating your budget spreadsheet.
Are you saving for something in particular? What debts do you hope to pay off with the savings you find? Are you wanting to save money for your kids? Get a reason, be clear when and how you will achieve it.To do this, list a goal, set your date for when you need to complete it and start working towards it.
Keeping your budget current is the key
Many people find bursts of motivation to save money and decide to start a budget spreadsheet; a week later, they couldn’t care less and old habits set in one again.
My piece of advice? Don’t bother creating a budget if you can’t promise yourself to stick to it for at least 2 months. This will give you enough time to collect data on where you spend and why. After that, it becoming increasingly more interesting to improve your budget to save more money.
To keep your budget current, you need to review it and update it at least once a week. If you do a two month trial, that is around 8 times you will need to update it. Not hard considering the potential rewards it may yield by discovering new ways to save money.
How to start a budget spreadsheet that works
If you wish to start a budget spreadsheet, you will need to gather your income, expenses and bank statements for at least two months.
From this data, you can open up a program like Microsoft Excel and make a list of income, a list of expenses and a list of goals you wish to achieve.
I won’t go into too much more detail about how to start an actual budget here, though you can read more about how to create a budget here.
Should you use online budgeting tools or Excel for your budget?
In the past, we often stuck to programs like Excel to create our budget spreadsheets. These days however, many other options exist; many of which are in ‘the cloud’. This means they are online only tools that lets you create, access and manage your budget from anywhere in the world.
To me however I still prefer the old fashioned budget spreadsheet made in Microsoft Excel. It’s a tangible copy you can refer to at any time.
If you really want to access your spreadsheet from anywhere, why not upload your budget to Google Docs? It’s a free Excel like program that lets you upload your spreadsheet and manage ongoing from anywhere.
My experience with Budget Spreadsheets
In the early days, I downloaded a vast array of free budget spreadsheets. I was often disappointed and found excel budget planners that were either mediocre or completely not cutting it to say the least. They were all designed by people on the fly and often didn’t factor in just how complex someone’s budget really can be.
The age old saying of ‘you get what you pay for’ rang true.
So I built my own budget planner
OK I lied. I suck at Microsoft Excel but I am really good at saving money. So instead of building it myself, I asked a company that does nothing but financial modelling and other complex financial spreadsheets to build me the best of the best budget planner I could imagine. It cost me a heap of money, but I wanted to get it out onto the internet.
I spent a number of weeks designing what I wanted included. I wanted to track multiple sources of income, numerous debts and outgoing expenses – along with the ability to make a quick budget or a more advanced budget for when I was wanting to really nail down my costs.
So I got all of these things designed into it. I spent a fair bit of money putting it together actually but the good news is that most Savings Guide readers who have downloaded it – love it. They can tell extra attention was put into it. It motivates you, keeps you moving forward and has a bunch of free tools to help you calculate your savings.
Why use the Savings Guide budget spreadsheet?
We (by we, I mean I) know money. We run Australia’s largest website on how to save money. In fact, we live and breathe the topics of budgeting, bargains, getting a better deal and killing debt.
How will our budget planner save you money?
- Saves time on making one.
- Lets you track your earnings, every dollar.
- Shows all elements of your spending.
- Helps you set savings goals.
- Creates a positive work flow of information on how to save your money.
- Reduces spending through understanding cash flow.
Why pay for your spreadsheet?
- We believe this is the best budget spreadsheet you will ever see.
- We have spent thousands developing it.
- Free budget spreadsheets do not motivate you.
- Free budget spreadsheets have far less functionality.
How to download our budget spreadsheet
You can download your budget spreadsheet from www.budgetspreadsheet.com.au – happy budgeting savers!