I know everyone just loves the “b” word. No, not THAT b-word. The other one: budget. I only know a couple of people who love to budget, and that does not include me. I budget because financial education and fiscal responsibility are extremely important topics that I wasn’t taught growing up. No one sat me down and told me how to create a budget or why it’s important to keep up with your expenses. If you’re like me and don’t like to budget or just can’t seem to stick to one, I’d like to help you out with that and show you how I budget and track my expenses on a full-time salary.
Why You Should Care about Budgeting
The Wrighter Lifestyle is a blog for millennials, college students, recent college graduates, and other people who just need to get it together. A large part of getting it together and adulting is making sure you’re on top of your expenses. Spending less than you make is the key to keeping your head afloat in this economy. Without a budget or without knowing how much you actually spend, you’re likely to drown. And while some people have family to fall back on, a lot of people don’t, so financial independence is a huge deal.
Building a Savings Account
Building a savings account is a luxury because you have to make enough money in order to actually have one. When I first went full-time (while still living at home, but paying $250 for rent and groceries per month), I was able to put quite a bit into my checking account. It went from $500 or so to $3,000 by the following Spring. While I had this luxury, a lot of recent college graduates do not.
So, if you’re in college, and you want to get a head start on saving (and you have the means to), put a couple of dollars into your savings account for the next couple of paychecks you receive. This can even include putting some of your Christmas, Hanukkah, or birthday money into your savings. I didn’t graduate with a lot of money in my savings account, but it was enough to hold me over until I began my paid internship.
If you’re in the workforce, and you know you have the means to put money into your savings account for each paycheck, you have zero excuse not to save. My cousin always told me to put at least 10% of your paycheck into my savings account every time I got paid. However, I was able to put in a lot more because I wasn’t paying rent or student loans at the time.
Creating Your Budget: Here’s How I Do Mine
Last year, I started using Google Sheets for budgeting. I’ve tried using budgeting softwares time and time again, and while it’s helpful for some, it wasn't helpful for me.
I started with Mint’s simple budget template. Eventually, I turned it into the picture below:
Mint’s budget template worked for a while, but then I realized I needed different budgeting categories, wanted a new format, and wanted to split my budget into two sections because I get paid twice a month.
If you don’t want to start with Mint’s simple budget template, I’ll show you how to do the calculations later in this post. Now let’s break it down section by section.
Basics
“Est.” means the estimated amount of the expense or income.
“Actual” means the true amount of the expense or income. Sometimes my paychecks will vary by a couple of cents, or my bills will be a different amount from month to month (like electricity), but I like to keep these numbers separate so my budget is as accurate as possible.
The “Left Over” column is how much money I have left over in a certain category. For example, if I have $90 set aside for groceries for the next two weeks, and I’ve spent $40, I’ll put $90 under “Est”, $40 under “Actual”, and the left over amount will be $50, which automatically filled by entering =B16-C16 in that cell.
Income
I have three rows open for different types of income whether it’s a paycheck, my grandma transferring money into my account, a tax refund, or me manually depositing money into my account.
In order to get the total for my estimated income, I enter =SUM(B4:B6) so I don’t have to manually add the numbers every time I enter a new amount for income. I then repeat this for the “Actual” column.
Expenses
I estimate how much my expenses will cost each time I get paid. The only expenses that are not estimates are my student loans, rent, Apple Music bill, Xfinity, Hulu, Planet Fitness, and dental insurance. For these expenses, they will be the same amount under “Est” and “Actual.” Everything else is an estimate.
Sometimes, I will have underspent or overspent in a category, and that number will show up in my “Left Over” column. To get that number, enter “=“ and the cell number of the “Est” cell, then “-“ (minus sign) and the cell number of the “Actual” cell.
If the number in this column is negative, I’ll change the text color to red so that I can either increase the number for my next budgeting period or watch my spending.
In order to get the sum of my estimated expenses, I repeat the same steps for my income total. For example, I entered =SUM(B12:B17), and repeated for "Actual."
Income vs. Expenses
Now, here’s where it gets a little advanced. Google Sheets automatically populates the total income cell under “Est.” because I set up the cell under Income vs. Expenses’s estimated total income as =SUM(B7). Repeat the same step for the “Actual” cell. The same is then done for my total expenses, =SUM(B28).
To get “Difference,” the cell will be the difference between the two cells you have for income and expenses in the Income vs. Expenses category. In my case, the cell says =MINUS(B33,B44). Follow the same steps for the “Actual” column.
Note: Make sure you use a comma for finding the difference and a colon to find the sum.
Tracking Your Expenses
If you want to get serious about budgeting, you need to track your expenses. I keep track of my expenses in my personal ring-bound planner on my budget inserts. Minted Sugar offers budget inserts in the form of checkbook registers and transaction trackers split up for each budgeting category, like this:
However, keeping a checkbook register or a notebook with your expenses is just as useful and efficient.
I will say, though, it can get hard keeping track of the balance you have for certain categories, so splitting up your transactions by each category may work best for you. That way, you’ll be to easily see how much you have left in a category.
Pictured above: checkbook insert from Sew Much Crafting
I hope this blog post gave you clarity on being able to save money and spending your money wisely. As always, contact me if you have any questions or if you have another way of budgeting that works for you!
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