![]() You get to decide how you are going to adjust your lifestyle choices to reach your savings or debt reduction objectives. If you want to buy coffee on the way to work & that fits in your budget then go ahead. Remember, these are your goals and it’s your budget. ![]() If you committed to reducing your entertainment costs by $100, write down exactly how you are going to do that. This is why we suggest you make specific, measurable, actionable, realistic, trackable goals – SMART goals – after you have figured out how to balance your budget to zero.Ĭonvert the changes you’ve committed to into actionable steps in the Goals tab. But overreaching is one of the main reasons why budgets fail. Deciding to pay $150 a month extra towards your credit card debt or putting $35 a week into an emergency fund is terrific if you have the cash flow. The problem with this approach is you don’t know what you can realistically achieve. Many personal finance experts start with goal setting when doing a budget. Step 3: Set actionable goals for debt reduction or savings Once you do, congratulations, you’ve brought your budget into balance. The goal is to have row 99 on the Your Budget tab equal to zero. Put as much as you think you can afford towards debt repayment, and if debt reduction is not your goal, towards savings. Are there discretionary expenses, or wants, you can cut back? Our spreadsheet features some useful spending ratios to give you an idea of how much you should be spending on each main category like housing, transportation and personal expenses. Using the Changes column on the Your Budget tab, review your expenses line by line. If you don’t have enough, you need to find ways to cut back on expenses or earn more. If you have money left over at the end of the month, decide where it should go – savings or debt reduction. This might seem odd but zero-based budgeting means that you allocate every dollar you earn to a purpose. Now you need to adjust your budget and bring it into balance which means budgeting to zero. Starting with a realistic picture is important because it explains why you may find your debt balances growing or why you can’t save money. Once you’ve recorded everything, take a look at how much income or money you have remaining at the end of the month right now (line 99).ĭon’t worry if your cash flow is negative at this point, you’ll bring your budget into balance in the next step. For recurring expenses like rent, insurance, loan payments, your cable or phone bill, pull out copies of your credit card statements, utility bills and bank statements for the past year. Begin by recording your income and expenses on the Current Spending tab of our budgeting worksheet. ![]() The first tab in our budgeting workbook is a 30-day spending plan. To get started with the budgeting process, download our Free Excel Budgeting Worksheet Download Step 1. That’s what step-by-step budgeting with an excel spreadsheet accomplishes. You need to find meaningful changes that can balance your budget. So, pick your budgeting system of choice, and make a plan to be debt free.īudgeting when you are broke, living paycheque to paycheque, or carrying a lot of debt isn’t just about expense control. ![]()
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