There is no need to spend a fortune on budgeting programs. Spreadsheets are the perfect way to manage your money and these come with office software, whether you are using Microsoft Office or Open Office. The trick is to knowing how to set up a simple budget within one of these programs.
Use the Templates
It is possible to download template to use within the spreadsheet programs. Microsoft Office has a range of templates for household budgets, retirement budgets and wedding budgets etc. These are perfect for those who want something quick to use from the beginning. However, these budget templates will not cover everything in a daily life and are for the average person.
Predicted and Actual
When making your own budget, you will need a predicted column and an actual column. These are for the predicted income and outgoings and what you actually earned and spent during the month. It will show you whether you are sticking to your budget, whether you are over-budgeting or whether you have spent more than you expected to.
Make sure the exact same items are included in the predicted and actual columns. It is very easy to avoid putting something in to one column to make the expenditure amount seem lower than it really is. You will just be fooling yourself and find that you have less money than your budget says you should.
Create Separate Sections
To keep you budget organised, it is worth creating separate sections such as household expenses, car costs and legal costs. This will give you the ability to make the budget personal to you and help you visibly see instantly where all your money is spent. Make the sections detailed by adding in separate accounts and each expenditure separately so you know the exact items you need to stop spending on instead of the general area.
Have an Extras Column
There are times that you will spend money on something that you do not expect to. This may be because you broke down, your boiler broke or another emergency in the house. It is worth having an “other” or “extra” section for these expenditures. There is no need to add them permanently to your budget unless you find that they are regular costs.
Save the Template
Once you have created your budget, save the blank template. This is the template that you will use to budget every month and the best way to make the most is by having the same layout and same details. It is likely that some areas of your budget will not be used each month but having them included will help you the months that they are used.
Input the Figures
Input your figures in your own currency. You will start with the predicted columns and will need to ensure you realistically predict your income and outgoings. If you under-predict you could find yourself struggling financially. As you go through the month, including your outgoings in the actual column and at the end include your income. This will show you the actual amount that you have spent and whether you need to tweak your predictions next month or whether you have more available for your debts or savings.
Using technology to help budget is quicker and easier than placing it all in a notebook. You will be able to look back over each month without flipping through pages and the computer can do all the calculations for you. Using a spreadsheet is the best option and you can do it yourself, without buying expensive programs or hiring an accountant or financial expert.
Post written and supplied by Gladstone Brookes, a UK based PPI company helping tens of thousands of people claim back their mis sold PPI. We love to share budgeting and personal finance tips.