So, following on from the last two budget posts, How To Make A Budget and 3 Easy Ways To Stick To A Budget, I thought it would be good to share our budget and how it works for us. Plus, I’ve done two different budget templates on Google Docs which I’ll share with you too – feel free to use these (you’ll have to save a copy) for your own budget if it works for you.
For our budget, just before the start of the year, I do a Financial Forecast. This is the first tab on our spreadsheet which budgets for the entire year ahead. I do a projected income assumption and then put in various numbers to the spreadsheet. The different columns in the Financial Forecast are ‘General Spends’, ‘Petrol’, ‘Bills’, ‘Mortgage’, ‘Overpayment’, ‘Water’, ‘Council Tax’, ‘Insurance’, ‘Savings (all)’, ‘NSDs’ and ‘Total’. The easiest one to fill in first in the forecast in the mortgage column – our mortgage payment every month is the same amount and won’t change, so that gets put in first. I then work through all of the others, based on what our budget has been for this year. For things like bills and insurance, these again are direct debits, so should’t really change too much over the year. Water rates and council tax will be similar amounts year on year, and if these change, then you can adjust accordingly.
For the items that are subject to change and fluctuations, I try and do a monthly average so that, over the year, it’ll work out approximately correct. For example, the amount of petrol we use depends on what month is it – we use less in the summer as I don’t have to travel so much for work. I budget a specific amount a month for petrol and sometimes we’ll go over that, but throughout the year, it evens out.
In terms of percentages, this is our budget:
– General Spends – 22%
– Mortgage – 22%
– Savings – 22%
– Overpayment – 13%
– Bills – 5%
– Insurance – 5%
– Council Tax – 4%
– Petrol – 4%
– Water Rates – 2%
General spends includes everything that doesn’t have it’s own column on the spreadsheet. So groceries, entertainment, shopping, pet expenses and any other spends go into this pot. This can be broken down like this:
– Food – 25%
– Shopping – 22%
– Entertainment – 17%
– Anything Else – 8%
– Car Maintenance – 8%
– Home stuff – 8%
– Pet Expenses – 5%
– Medical – 3%
– Presents 3%
Shopping is a very vague term, but this covers anything we buy in town. To be honest, we rarely hit the amount allocated for this each month, so it rolls over. This includes all clothing items as well, so work clothing for me costs a bit when I buy it. I like quality over quantity when it comes to clothes (but I’ll leave that for another post!).
I actually think, looking at the percentages above, that we have a pretty generous budget. In fact, our savings rate could be higher. If you combine the savings and overpayments, it comes to 35% of our total budget, which is good but could be better. After all, these two combined are the sections that will help us reach our ultimate dream. I wonder if I could get that number to 50%? I’d definitely like our savings rate to be higher. I need to do another re-jig of the budget I think!
So, onto the templates. I’ve got two to share with you, and if you want to use them for yourself, please feel free. If you do, can you take a screen shot and share it on twitter for me? It would make my day to know I’m helping someone out with their budget.
1) Budget Spreadsheet Style 1 – this is the one I use. There’s a forecast tab at the start, where you can plan your entire budget for the year. I’ve described above how I do this, but do this in a way that works for you. The second tab is the ‘Actual’ one, which is updated regularly as the year progresses. Then there’s a tab for each mont of the year, where you can record every spend during the month. You then transfer the number at the bottom to the space on the ‘Actual’ tab for that month. I’m sure there’s a way to do this automatically but I’m not the best at spreadsheets! If someone could tell me how to do that, I’d be forever grateful to you.
2) Budget Spreadsheet Style 2 – this is where you have all your allocations and it shows whether you’re over budget or not. I don’t tend to use this method, not because it does not work, but mainly because I like to see the big overview. That being said, that fact that you can see how much you have remaining on each of the sections of your budget is good, especially if you are struggling to stick to it.
So, there you go! How our budget works and two budget templates to use if you find them helpful. I think that I need to re-adjust our budget, after writing this post, so watch this space. I’m determined to increase our savings rate somehow.
Do you have a budget? Are you a fan of spreadsheets? I’ve love to hear from you!
P.S do you have twitter? Follow me here!