Your financial health largely depends on your money management skills. You must, at all times, be aware about your financial position so that you can astutely plan for your upcoming months or even years. Having an in-depth knowledge about what your sources of income are and your spending habits will definitely make you financially savvy and this is what a goal of a budget is.
- 1 Budget Templates
- 2 Financials and the Headless Turkey—A Worldwide Problem
- 3 A Budget Template Will Enable You to Save More
- 4 Budget Worksheets
- 5 Excel Budget Templates
- 6 Budget Spreadsheets
- 7 Elements of a Good Budget Template
Most people believe that scribbling down their income and expenses on a piece of paper is what a budget is all about. But believing that your financial condition will turnabout by doing it is like banging your head up against the wall and expecting the wall to break.
Financials and the Headless Turkey—A Worldwide Problem
Most people, the world over, lead their life like a headless turkey not knowing where their financials are heading, they simply choose to remain ignorant. If that’s the case with you then we are sorry to tell you that you will always whine over your finances, blame your employer for paying you less salary and criticize the IRS for taking a major portion out of your salary as taxes . But, if you really want to become financially independent and escape the rat race then you must hustle up and download budget spreadsheet template from our website and take control of your financials.
By plugging in the amount of your monthly income and expenses into the monthly budget template you will be able to visualize and get a holistic view of your spending habits that you can then work on to improve. People who have developed a habit of maintaining their budget gets rewarded in the long term as they are able to plan their spending and are able to save more.
The whole point in making a budget is to determine whether you are living within or beyond your means. First step is to jot down all the income generating sources as well as all the income consuming sources (all the common income heads and expenses are listed in our budget worksheet that will make your life easy and will save you from putting undue pressure on your brain). Then noting down how much have you spent in a given month and finally subtracting it from the income received. If the answer is positive then you should give a pat on your back, coz you were able to spend less than your income and save more.
It is important to note here that merely jotting down the values aren’t going to help you in anyway, the real thing is analysis. This is why in our excel budget template you will find that the values that you’ve plugged in previously are then in later sheets represented in terms of charts and graphs so that you can make sense of the data and plan your financials accordingly.
A Budget Template Will Enable You to Save More
Work – Earn – Spend – Repeat. That’s the way most of us have been programmed inadvertently by our elders (primarily the Baby Boomers) who had a safe and secure job, and our lack of education in managing our own finances from an early age. But today, there is no such thing as a safe and secure job, therefore, it is more important than ever that we get a hold of our financial future and start saving for a rainy day. Most people make a grave mistake of believing that whatever is left after spending, is savings. You can’t be more wrong about it.
Savings is the amount that you have decided beforehand to put into a bank, mutual fund, or savings institutions so that you can use it in the future. By having a personal budget template and the patience and ability to strictly adhere to it you will find yourself setting aside a specific percentage of your income as savings that you otherwise would have spent carelessly.
A Monthly Budget Template Will Keep You Focused on Your Money Goals
Have you ever walked down the street and bought those unnecessary items that you can easily live without. Well, that’s common and prevalent in today’s world where the marketing tactics propels people to buy things that they don’t need. Maintaining a budget worksheet for every single day will let you cut on these unnecessary items/expenses as you will be intentional and fully in control of your spending habits.
Whether you have a monetary goal of paying your college tuition fee that is due after some months or want to save 100 grands before you turn 26 years old, budget is the tool that will assist you in planning and keeping your attention focused to your monetary goal.
A Budget Helps You in Visualizing Your Future Financial Standing
You are earning some obscene amount of money right now? Great! But there is one problem. You won’t be earning it for an infinite amount of time. So, in order to ensure that when the music stops, ball doesn’t ends, you have to look many years ahead into the future and try to alter it. In this case a budget will act as a crystal ball that will allow you to look at your future financial muscle.
A Budget is like Your Personal Financial Advisor
What does a financial advisor do? First of all, he will analyze your financial health through your balance sheet and then will make investment decision for you based on your risk appetite. This isn’t something difficult for anyone who has financial acumen. You can do it yourself and the first tool that you will be requiring is the budget through which you can gauge the amount that you will be able to save in future years, and then plan where you should invest your savings. In other words you will create an investment portfolio that will produce returns and will compound periodically.
Remember that if you do not care about your money, no one else will. It’s your sole responsibility to keep yourself updated and informed on the financial matters.
Excel Budget Templates
Having a Budget is Crucial for Early Retirement
Unless you live in Nordic countries, you do not have to worry about your retirement but if you happen to live in any other part of the world, then the responsibility of saving for your retirement rests solely upon your shoulders. Right now, as you may have already observed that there is a strange phenomenon of early retirement that is quickly and swiftly gaining popularity among young minds. If you also fantasize about retiring early and living a life that you have always dreamed of then it’s imperative that you maintain and stick to your budget. A budget spreadsheet will help you in looking at the possible ways through which you can increase your passive income.
Remember that a journey of thousand miles began with a single step and that single step is absolutely crucial to take. Now is the time to act. Click here to visit our website for downloading a budget template.
Hey, But How Will I Escape the Rat Race?
Glad you asked. Having a budget and sticking to it is the single most important thing that will pull you out of the rat race. This is because it will give you a clear cut picture about your present financial conditions and will let you observe the mistakes that you are currently making. In order to escape the rat race you must plan your budget in such a way that your savings receive a good and hefty amount of your income. These savings are then not just left in a bank vault rather they are invested into various investment avenues. Return from these investments will be recorded in the additional or portfolio income section of your budget spreadsheet template.
Now your goal is to make this annual income from your portfolio investments greater than your annual salary. As soon as it is achieved, hey presto, you are out of the rat race. Do not in any way assume that after escaping the rat race, making a budget is no longer relevant; having that kind of a mindset will land you into the rat race again. So you see, budget is something that you must pay close attention to.
Elements of a Good Budget Template
What makes a good budget template? A simple answer could be ‘the one that you are comfortable working on’. You must realize that there is no one size fits all when it comes to the budget template that is why we have a list of various excel budget templates and budget template on PDFs on our website for you to browse and select the one that you are comfortable with. Before you choose a budget template remember that every good template will consist of the following sections.
This section of the budget template will contain expenses without which you home cannot function. Items such as mortgage payments, electricity/gas bill, internet fee etc. Are included in this section of the budget template.
Transportation and Health Expenses
Neither do we have wings nor are we immortals. Both these expenses are often overlooked by most people. Your health expense will mainly include the premium that you pay for your health insurance policy and the bills of your dentist. Transportation expense will include premiums paid of your auto insurance, fuel costs, tram fare (if any) etc.
Daily Living and Entertainment Expenses
The third and the most important part of your budget template will include the daily living expenses. Most of the time, these expenses are understated. Daily living expenses will include the money that we spend on grocery, cosmetics, laundry etc. while the entertainment expense will include money spent on the purchase of books, games, and gaming console, among others. Entertainment expense also includes the money that you spent on a vacation or excursions.
These subscription fees are like an annuity and are mostly neglected when establishing a budget for a given month. Count all the magazines that you have subscribed to and the ones that you read. Unsubscribe the ones that you don’t frequently read and the ones that you can easily find in your local library. If you have a membership of any club (or clubs), then do remember to include the subscription fees that you pay for availing the club amenities.
How much and to whom do you owe will be recorded under the section ‘Obligations’ of your monthly budget template. Amount of federal taxes, student loans and credit card fees are some common items that should be recorder under the section ‘Obigations’.
Don’t hold back when recording the amount of savings in your monthly budget template. This money under savings, if invested prudently, will compound and will come in handy on a rainy day.
Wait! The list is not over yet. The most important part that a budget template will contain is the analysis part. All the data that you have entered does not make any sense unless it’s analyzed. Every good excel budget template will have an option through which you can visualize the data entered thereby making it easy even for a layman to understand.
Also, every good budget template will allow you to plug in two values (i.e. estimated and actual value) for every item. This will give you an indication that by what margin are your actual values deviated from the expected value.
Now if you are truly interested in getting a hold of your destiny (at least the financial facet of the destiny) then take the first step in downloading the budget template from our website and embark on the journey towards becoming financially independent and escaping from the rat race.