Budgeting 101

In the past I've written about my financial struggles. Now that my son is going to daycare and I'm working again I still find it hard to get by each month. My body says working 4 days is too much but financially working only 3 days is really not an option. Because I was stressing out about this I've decided to ask my colleges from our financial department for help. I had a really helpful one on one talk with our sr. financial worker. He advised me to make a budget. To write down all my expenses and income so I would know what amount I can budget for other than fixed costs.

I used a Google Drive spreadsheet (you can download Google Drive for free when you have a Google account) and some simple formulas to add up the amounts automatically.

Here's what you do

1. Go to Google Drive and select Make and then choose spreadsheet.

2. Name your spreadsheet by clicking the box next to the green Spreadsheet logo

3. Fill in all your monthly fixed costs

I also like to add the payment dates to prevent late fees
There's an easy formula to automatically add up your monthly fixed costs.

You want Google Spreadsheet to show you the total amount in the blue lined box. You can see the formula in the box above: =sum(C4:C14).
'=' Tells spreadsheet your typing a formula. 'sum' Is a command to add up.
You want the selections from Electricity, box C4 to Child care C14 to add up by telling spreadsheet to add up the boxes within the (.....). Press enter and the total amount will be calculated automatically.

4. Creating your budget

Below your monthly fixed costs we're gonna add a budgeting section.

You will know what amount you can spend after deducting your total monthly fixed costs from your monthly income.

Ok, here comes the 'hard' stuff, deciding what your budget for each spending category is gonna be.
I've summed up all the categories of variable spending. I check my agenda to see the events I have planned, upcoming birthdays, parties or like this month the periodical inspection of our car.

Now you can plan what you want to spend. For instance you can budget that you won't spend more then $ 10,- bucks on birthday presents. But you can also calculate how much gas you're gonna use if you have to travel to appointments. When I first did that I was shocked by how much gas I actually used for just visiting someone. By looking ahead you can budget more accurately. You can change the numbers if you have or want to spend more in a particular category. In this example I've overspend $ 5,- on gifts. To still have my budget working correct I have to deduct $ 5,- from another category, for example shoes.

You can use the same formula for adding up your monthly fixed costs to calculate your total budget.

Another tip is to automatically transfer your budgeted money for savings to your savings account.
You can also add those dates to your sheet

As long as you don't overbudget more then your total amount you're ok. Make sure to deduct the money you spend in each category from your budgeted amount so you can see what amount you've got left.
Seeing my budget and keeping track of my expenses makes me more conscious about the money I have, or sometimes don't have.

Good luck with your own budgeting spreadsheet. Let me know if it's working for you.

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