Monday, October 6, 2008


I'm learning the importance of a budget more and more as I look at the shape of the American economy and see so many families struggling to hold on to their homes and jobs. More importantly, I'm realizing the advantages and the truly gratifying security created by maintaining a budget. Personally, I don't keep a tight budget. I definitely don't keep as tight of a budget as I should. (I eat out nearly 90% of the time!) I do, however, make it a point to plan my bills 6 months ahead of when they are due. My budget dictates my check months before I receive it, which protects my money from any impulse shopping or emergencies that may occur.
In order to keep track of my budget, I created a simple spreadsheet using Microsoft Excel, which acts as my own personal simplified version of Microsoft Money. I crafted my spreadsheet to fit my own personal style, making it easier to use for me and my situation. I simply input the value of my check, which happens to stay the same, followed by a list of my monthly bills. Each bill pretty much follows the same cycle. The amount stays the same (or there about) and I have to pay it every four weeks or so. So, swapping bills out every other pay period, my budget looks the same every four weeks. For example, if I paid my rent this pay period, and skipping the next pay period, I would be paying my rent again in four weeks. The same thing repeats for all of my bills. Following this cycle, I can plot my bills out for the next 6 months (or 26 weeks). I then subtract my bills from my check amount (including the $150 I plan to save from each check). The remainder of my check is what I use for food and everyday spending.
My spreadsheet is very simple and to the point. I keep track of it on my computer as well as keep a hard copy, a long with hard copies of my bills, in a 3-ring binder. My spreadsheet for this week looks like this,

(You can click the image to enlarge)

Notice my saving tally. I plan to use this savings to help generate more income as it grows.
It's amazing how much of a difference was made once my budget was written down and I could see it on paper. Saving was allot easier once I started and saw how much money I actually had to work with. Also, my bills got paid ahead of time and my credit card balances stayed at a minimum. This year, school will be paid for without a loan, and I will be paying for my summer vacation if January! Anyone, who's planning on becoming financially free should make it a habit to keep some kind of budget plan.

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