How To Create A Budget

Over the past five years I’ve tried countless ways of creating a budget. From Google Sheets to a plain old lined notebook, I’ve tested different layouts and ways of outlining it all.

Although I do enjoy budgeting in Google Sheets, this year I’ve been doing them on paper and really enjoying it.

I took some time to test out different layout variations until I finally settled on one that works for me. I’ve included it as a printable to help you get started on creating your budget.

1. list your income

The first step to creating a budget is to list your income for the month. On the worksheet there is an area to list each one of your incomes with the pay date and the budgeted and actual amounts.

If you have a variable income I would suggest writing down the low end of how much you think you will bring home. It’s better to create a tight budget with a low number, than to overestimate your income and have to readjust your budget by cutting things out.

Now that you have listed your projected income for the month, it’s time to move onto your expenses.

2. tell every dollar where to go

On the worksheet I have separated the expenses into two different categories, fixed and variable.

I consider fixed expenses to be those expenses that I have month to month and remain the same (more or less). Examples of this would be rent, utilities, minimum loan or credit card payments, sinking funds etc.

My variable expenses would be any expense that is unique to that month or that I have the ability to change up month to month. This would include birthday gifts, holidays, birthday parties, groceries, spending money etc.

I like to sit down with a calendar when creating my budget. This way I can take a look through the month and make sure I’ve accounted for all the birthdays coming up and special events I will need to budget for.

3. total it up

At the bottom of each section (income, fixed & variable expenses) there is a space to enter your column totals. Once you have added everything up and filled in these spaces, transfer this information to the TOTALS section at the bottom of the sheet.

In this TOTALS section you will be entering all of your income and expense totals for the month. Subtract your expenses from your income and you get my favorite number….. the amount you can put towards savings or debt payoff!

If you get a negative number, head over to your list of variable expenses and see what adjustments you can make to bring that total down.

an extra step that makes a huge difference … 

An extra step I take to make budgeting “doable” and much easier to stick to is break down my income by paycheck. By doing this, I am able to put those dollars where they need to go as soon as I get paid. I’ve found that the clearer I make my budget, the easier it is for me to stick to it.

This is where the Income Breakdown worksheet comes in. On this worksheet, I list each income I will receive by date. Then under each income I start listing the expenses that will be deducted from it.

I recommend sitting down with a calendar in front of you so you can see what bills need to be paid with what paycheck. This way you are making sure all your payments go out on time.

what’s the process when I get paid?  

Because we’ve done all this budgeting work ahead of time, when payday comes around the process is pretty simple.

As soon as I see our paycheck hit the bank, I head straight to the income breakdown worksheet. With this tool I know exactly what needs to get paid with that paycheck. I pay any bills I need to pay online first, then I withdraw the cash that needs to go in my cash envelope system. I then transfer the remaining amount to our savings account.

If we wait a few days to transfer that leftover money into our savings account, we are guilty of treating ourselves to extra meals out just because we know there is money in our checking account.

repeat every month!

If you’re new to budgeting it’s going to take a few months to get your budgeted expenses just right. Remember it’s ok to tweak it each month until you get to a point where you can actually stick to the budget.

It also gets alot easier to do. Next thing you know, you’ll be looking forward to the end of the month so you can start working on the upcoming budget!

If you have any questions feel free to leave a comment below or contact me on Instagram.

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