Getting a grip on your monthly expenses, creating your budget.

In my last post I asked you to do a simple exercise. If you haven’t created your excel based check ledger please stop reading, go to my last post and create your ledger. As I take you through this process each step builds on the next, so it’s important that you take each step on the path.

The next step in the process of creating a useful budget is listing out your monthly income and expenses. Focus on the expenses that are about the same each month. I provided an example with notes below. As I mentioned in my last post you should break your budget down into manageable pieces. I’ve always found that a 2 week period is best, the first and second half of the month works best for me. This way if something gets out of balance it’s easy enough to find the error.

Action item number 2:

Now that you’ve put your bank account ledger in excel add a section next to the ledger detailing all of your monthly income and expenses. This should look very similar from month to month, in time we will project this out to cover a longer period. But for now break up your spreadsheet into two, 2 week periods over the next month. In one column list all of your income and in the next column all of your expenses. As you use record your actual banking activity replace the budgeted amounts with the actual amounts. See below:

Budget template 1a

As you start recording activity from your bank account you replace the items in your budget with actual amount (hopefully similar amounts if you budgeted well, this can take some trial and error).

Budget template 1b

For a more in-depth look you can link to the spreadsheet on Google Sheets here:

Full budget

I promise you that this is not hard once you get use to it. Please don’t get discouraged, for now simply do your best to determine your monthly income and expenses. We will be going into more detail about how to use this tool as we move forward in future posts. I promise you that it’s not a hard process once you’re up and running.

As always, please contact me through the comments section if you have questions.


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