I love planning and organising, something about seeing everything neatly in its place or planned out on an excel spreadsheet just makes me happy. I want to start a new series on the blog around planning, organising and life hacks as such.
Everybody should know how to plan a monthly budget, nobody wants to get to the third week of the month and the bank balance is in double digits but you’ve also got 2 nights out or a bill that needs to be paid. Spending a bit of time planning at the start of the month means you can see what needs to be paid bill wise and also what you’ve got left over for eating, entertainment and saving. Here is how I plan out my monthly budget.
1. Use an excel sheet – Using an excel sheet makes it super easy to calculate everything and it can be easily replicated for the coming months as usually bills are pretty much the same each month. I have one fully set up which takes into account income, bills split by utilities, card payments, savings and spending that always happens such as food and petrol. It is set up with formulas that calculate incoming and outgoing payments letting me see exactly how much I should have left at the end of the month.
2. Go onto your banking and list all direct debits / recurring payments – Go onto your online banking or pull out a bank statement and list all of your monthly recurring payments on the excel. Even down to small things like phone insurance and Netflix get them all on the sheet. I list them in the first column and then put the amount in the next, I have a 12 month budget planner so I drag each row across the 12 months and if any amounts change I go back in and change this in the specific cell.
3. Add in your income – Add in your monthly income, I put this at the top of the excel before all of the outgoing bill payments. If you get paid monthly this is easy if it’s weekly then times your after tax income by 52 and then divide by 12 to get a monthly figure but bear in mind some months you may get paid 5 times and others 4 so there’s some rollover of income between months. Check your payslip or payment received and add in any extra’s if your on a salary at the start of each month or weekly.
4. Total up incoming / outgoing – total up your monthly recurring payments and then minus it from your income to see how much remains which will then be used for other monthly spending. I use a sum formula on all of the outgoings which goes into a cell below income and then below this income cell minus outgoing cell to show how much is left.
5. Food / Essentials – Looking at what you have left from step 4 how much of this needs to go towards food, toiletries and essential items like petrol, add these in again in rows with the name food for example in the first column and the amount in the second. I include eating out in my food budget to keep this under control, if I want to eat out twice in a week I will try to be more frugal with my weekly supermarket shop and do things like make a big lasagne that can be eaten for more than one day with not much extra cost.
6. Savings – Once you’ve added the above in you should have a full list of outgoings that are essential every month. With any remaining funds you need to decide if you want to save any and if you want to dedicate any to what I would call luxury items or treats. For example I put £50 away for trainers as I love to collect these and I set aside a regular savings amount for emergencies and general saving. I think it’s really important if you can to save each month as you never know what might happen. Dragging the savings column along also let’s you see how much you will save over the year which is a big motivation to keep going. I recommend setting a realistic savings goal each month and then sticking to it rather than being overly ambitious and not keeping to it.
7. Extras – If you make any other purchases then add these into the sheet at the bottom but make sure they are calculating into the formula taking away from your income. I find it helpful doing this as it’s easy to see where you may have overspent, I do have an overdraft and a joint account where money comes in and goes out all through the month so if I do overspend it can be tricky to see where this happened on my banking but if I just add it to the excel I can compare it against money in / money out on one sheet rather than scrolling through endless transactions.
I have had a bit of change in my life which means my income isn’t regular at the moment and has reduced. I’m working towards doing freelance work or a remote position that works with where my life is right now and this sheet has meant while I am getting myself set up I can go in and see where I can make savings; for example cancelling Now TV and only having Netflix or reducing down petrol and food as I’m not going travelling to an office anymore or needing to buy lunch out. It also lets me see by removing my income how much we need to cover everything so how much work I would need to get freelance wise to achieve this or the minimum amount of part time work I would need to do.
I hope this was helpful! If anyone wants me to share the budget template sheet I put together please do let me know in the comments and I’d be happy to link it or send it over to you.
Thanks for reading!