Everyone processes information differently. Budgets are the same. My husband and I do budgets differently. He likes to download the data every month using a budget program, ex. quicken. He likes making different graphs and he likes to make very specific categories for all the purchases made. I, on the other hand, like using a spreadsheet and input expenses as soon as I make them. My categories are more broad. If it is bought at the grocery store it is grocery, so that would include diapers, serviettes, garbage bags. Otherwise it will go into household, so purchases made at a department store etc. Otherwise I would have to go through all my receipts, itemize every item purchased and recalculate associated taxes. I like doing math, but not that much.
The current spread sheet I use was from the W network money show called Maxed Out hosted by Allison Griffiths. You can still download the spread sheet here. Click on the heading at the top called budget template tool.
I tweaked it to make it work for me. I changed some of the categories, got rid of some added others, made it a 12 month spreadsheet, so I could look at the whole year and see trends, and got rid of the percentage calculations, as that was not important to me. I like this spreadsheet template as a starting point as it is colourful, the formulas are already plugged in for you and at a glance I can easily see how we are doing for the month. You don't need to use the template, you can make your own. This template just helps you think of categories you might not have thought of on your own. It really is the jumping off point.
If you are not familiar with excel or do not know how to manipulate existing documents, go to youtube. There are tons of tutorials that will help you figure it out.
So to the budget!
The first step of creating a budget is to keep track of spending over a period of time. I would say at least 4 months. The longer time you track your spending the more data you have to use. BE HONEST. No one will see it but you. There is no one to please but yourself. If you have a bad spending month, that's okay, just keep going and keep tracking.
Once you have tracked your spending take the averages. These averages will be your monthly budget amounts. So take the average of your groceries, the average of utilities, the average phone bill, the average savings, the average other. Some months our car fuel amount is higher because we went visiting family or went into Toronto for a Blue Jay's game. Keep those higher amounts in your average. It will make your average higher, but if you don't spend the amount allotted you can set it aside and have it ready for the months when you do.
Once you have your averaged amounts for your categories add them up. You now know what your average output is each month. Subtract that amount from your monthly income. Hopefully there is a surplus. If you have a deficit it is time to look at where you can makes some cuts in your spending.
When I made my budget I added and averaged only items that needed to be paid every month such as the mortgage, hydro and phone. That way I knew what I had leftover to use to purchase the non-essentials, like clothes and eating out. Non-essential things vary from month to month or you may have to save up for some of the non-essential items, like new shoes or house repairs. You can use this leftover "slush fund" to prioritize spending, for either fun or functional, without compromising your necessities of life.
I hope this helps and didn't make budgeting more confusing. To quote Red Green - "Keep truckin'. We're all in this together."
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