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 A Budget Worksheet can come in handy if you've never put a budget together. Creating a budget is probably the first line of defense against runaway debt and we've described how to get started putting together a household budget in many of our debt consolidation articles. We realize that many people simply do not have the skills or time to put together a budget worksheet so we thought we would give you a jumpstart in this publication.
Getting Started with an Annual Budget
The only thing you need to get started is a spreadsheet application. Microsoft Excel, Lotus 1-2-3, StarOffice, OpenOffice (Calc) - anything will do. If you don't have a spreadsheet application, then take a look at our article on Resume Builder, which describes how you can get a free copy of OpenOffice. Most individuals do not need any specialized budget software to create an annual family budget.
Once you have a spreadsheet application, you will need to download a monthly budget worksheet that Microsoft has already put together. You can download this free budget worksheet here - just save it to your computer and open up the file. The rest of this article will provide you with an in-depth explanation of how that budget worksheet template works and how to figure out if your budget is working.
Family Budget Basics
There are really only two things that need to be in balance to keep you out of debt - income and expenses. In the same way a profitable business operates, the goal of your personal or family budget should be to have Income that is greater than Expenses - for the entire year.
This last point is important because you might have large expenses - such as life insurance payments or holiday gift purchases - that might result in monthly expenses that are sometimes much greater than that month's budget income. But over the course of 12 months, your income needs to be greater than your expenses or you will soon find yourself buried in debt.
Sources of Family Income
Most people have a deep understanding of their income sources - it's the expenses that tend to be harder to keep track of. The on Row 5 of the budget sheet we're working with the term Wages appears. These are your after tax wages that are deposited into a banking account or the value appearing on your paycheck. This is the money that you can actually spend, after deductions such as taxes and medical insurance have already been removed.
On this line you want to enter your total household wages for each month. If you are paid weekly, then for some months this will be five paychecks. If you are paid bi-weekly, then for some months this will be three paychecks. The worksheet takes the wages in January and populates all the other months.
Budgeted Income Example
Since there are 52 weeks in a year, if you are paid weekly, then you want to take your paycheck and multiply it by 4.33. If you are paid bi-weekly then take your paycheck and multiply it by 2.17. Below is an example of an Excel formula that is used for a person receiving a $750 paycheck weekly:
=750*4.33
Other Sources of Income
On Row 6 of the worksheet you want to enter any interest or dividends you are paid monthly. If you are having budget problems, this line is likely to be zero, but if you have some money in the bank earning interest, take a look at your latest bank statement and enter a value for each month. Don't worry yourself if the number might not be the exactly right; just get it in the right range.
Row 7 of the budget worksheet is labeled Miscellaneous. If you have another steady source of monthly income or some mysterious source of income (We don't want to know about it...) enter that value on this row. This is not the place to get creative, just stick to reliable sources of income.
This is a good place to stop now that we've finished the income section. It might not seem like much, but we've covered a lot of ground already. In our next installment of this budget worksheet we'll be covering the expenses portion of an annual budget.
About the Author - Budget Worksheet Part I
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