You’ve added up income, categorized expenses, and created a rough outline for a budget. Now, you’re ready to set up a simple budget spreadsheet. You can find budget templates online, use an app, or try out The Balance’s Simple 50/30/20 Budget spreadsheet.
Create Your Budget
Lay out your budget in a spreadsheet, considering both the broad categories of spending (such as housing, food, transportation) and your needs (50%), wants (30%), and savings (20%). Remember that broad categories may help you capture your spending with the most ease and least fuss—and increase your chances of sticking with a budget.
Track Your Expenses
Throughout the day, write down your expenses in a notebook, keep track in an app, or on your smartphone.
“Tracking expenses isn't a time to judge good or bad or to even take action,” said Jenifer Sapel, president of Kirkland, Washington-based Utor Wealth, by email to The Balance. “Think of it as like reading a book or meditating. It’s a time just to take note of the data.”
Then, enter your expenses into the spreadsheet at the end of the day or week. But if you’re intimidated by spreadsheets, that’s okay, she explained—the tool isn’t as important as the process of taking inventory.
Budgets and credit cards can mix. Financial blogger Alene Laney uses her credit card for everyday purchases to earn miles and points. Then she uses the card issuer’s spending reports to review expenses, which she prefers over her bank’s spending report. “When you have good spending habits in place, it won't matter whether you use a credit card or a debit card,” she said in an email to The Balance.
Adjust Your Habits
Money coach and Certified Financial Behavior Specialist Carrie Friedberg suggested undertaking a line-by-line review of your plan, mid-month.
“Compare the budget versus actuals to date, and make adjustments for the money available while there’s still time,” she said in an email to The Balance. “(At month’s end) reflect on what happened over the last month and use that data to create a more accurate plan for the upcoming month.”
If you need to reduce some of your “fun” spending, first decide what’s particularly enjoyable about that expense, Sapel suggested. Then, brainstorm more affordable ways to earn that enjoyment.
“For example, in a pre-Covid world, I was a regular pedicure goer,” she said. “That expense for me isn't about my nails, though. It’s about having an hour of quiet me-time. I can accomplish the same with a solo walk or visit to the library.”
Automate some spending to save time, reduce stress, and avoid late payments, suggested money coach and Certified Financial Education Instructor Willita Cherie. Signing up with the provider is the safest method. Bank auto-payments may not always deliver on time, so schedule payment a few days in advance of the due date, Cherie said in an email to The Balance. In either case, request email or physical receipts to track proof of payment.
Next Steps and More Resources
You can use The Balance’s Simple 50/30/20 Budget spreadsheet to track your income and spending and see how you're doing. Or, if you’d like to use more automated apps or software to create and maintain a budget, options include Tiller Money, You Need a Budget (YNAB), and Mint.
Next, you’re going to learn how gamifying your budget might help you reach your goals.
You can also learn more about keeping pace with your budget:
- It’s hard to create a budget—and harder still to stick with it. Learn How to Motivate Yourself to Stick With Your Budget.
- If you’re still finding it hard to keep up with it, maybe it’s not you—maybe it’s your budget. Here are some ideas on Creating a Budget You Can Stick With.
- Once you’ve been at it for a while you may not be getting the results you expected. Reach out for help if your Budget Isn’t Working.