FREE Personal Budget Templates – Excel

A budget is crucial if you want financial stability and independence. In addition, financial literacy gained from budgeting will allow you to know how and when to spend your money. Finally, a personal budget will help you create a balance between your earnings and expenses.

Therefore, budgeting is essential to accomplish your short-term and long-term financial goals. Furthermore, a personal budget will allow you to categorize your expenses and prevent you from making unnecessary purchases.

A personal budget is essentially meant to:

• Help you track your finances and live within your means and avoid overspending.
• Familiarize yourself with and understand the different types of budgets that you can use to manage your finances.
• Assist you in selecting budgeting techniques that complement your earnings and lifestyle.
• Help you plan and manage your finances and expenses over a certain period.

What is a Budget?

A budget is a financial plan that helps you create a balance and stability between your earnings and expenses.

Additionally, budgeting can help you comprehend your spending habits; this allows you to abolish poor spending habits and adopt habits that will help you attain financial stability and independence.

In most cases, a budget will give you a platform to track your revenues and expenditures; this is an effective way of spending within your financial abilities. In addition, a budget assists you in splitting your finances into income and expenses. Incomes include tips, bonuses, salary, and capital gains, while expenses include debts, bills, transport, food, etc.

Why do You Need it?

If you have a budget, you can easily control your money. This means you can save your money while keeping track of your spending to avoid overspending and debts. Note that there are different budgeting techniques that you can use to track and control your finances. Therefore, select a method that best suits your earnings and financial goal.

A personal budget template is a document that helps you organize your finances and gives you a blueprint on how you will spend your money. A budget template is designed to help you place your expenses into categories. This makes it easier for you to understand your spending habits.

Therefore, creating an accurate and detailed budget that clearly outlines your current financial state is essential. Our budget templates will save you time as they already have everything you need to create a perfect financial plan. You can access and download these templates from our website for free. Additionally, you can customize these templates to meet and satisfy your requirements.

Some advantages and disadvantages of using a personal budget are shown below:

Pros

When you use a personal budget, you will benefit in the following ways:

• Reduces financial stress: A personal budget is crucial as it allows you to organize and use your money wisely. As a result, you can make the right purchases and put money aside for your savings. Therefore, with your finances in place, you will have less financial stress because you can deal with emergencies.

• Gives control over spending: A budget allows you to organize your bills and expenses categorically. This gives you a blueprint of how to spend your money. Therefore, you can allocate enough funds to each category stated in the budget. As a result, you will develop good spending habits that will allow you to save money.

• Helps track expenses: You become financially limited if you constantly fall into debt because of overspending. This is why using a budget is crucial. A budget allows you to track your income and expenses effectively. As a result, you will identify and stop unnecessary expenses and poor spending habits.

Cons

On the other hand, the negatives of using a budget are as follows:

• Requires commitment: Financial independence is essential. However, to attain this, you must be committed to your budget plan. Failure to follow and commit to your budget will make you lose control of your finances and get into unnecessary debt. Therefore, for you to attain financial control and independence, you need total commitment to your budget.

• Depends on control: A personal budget will only be adequate if you can control your spending habits. Understanding how much you are earning and how to use the money correctly is crucial. Therefore, it is necessary to create a budget that will guide you on how and when to spend your money.

• Keeps restrictive: In most cases, budgeting is considered a restricting financial plan that prevents you from spending on things you love. Note that you can counter this by setting money aside for fun activities like vacationing or purchasing new shoes.

Personal Budget Vs. Corporate Budget

A personal budget is essential when creating a plan to spend your earnings. A personal budget usually includes housing bills, transportation, utilities, food, and groceries. The budget allows you to strategically allocate funds to each category and still manage to put some money away for savings. Moreover, with a personal budget, you will have a way of paying off your outstanding debts, clearing credit card debts, and even putting aside emergency funds.  

On the other hand, a corporate budget is essentially used when creating a financial plan for a business. Corporate budgeting allows a business to finance and deal with its expenses comfortably. Corporate expenses may include salaries, rent, debt, dividends, and financial disbursement.

Budgeting is necessary for any organization, especially if they want to increase their projects and revenues. The corporate budget will allow the business to spend wisely and invest in suitable projects.

Creating a personal budget is the first step toward financial stability and independence.

Below are steps you can follow when creating a personal budget:

Determine your expected monthly income

When creating a budget, it is vital to have an approximation or an exact figure of your monthly, biweekly, or weekly income. You can do this by gathering income details from all your sources.

It is crucial to find a way to accurately calculate your net income if you are self-employed, have irregular income, or have more than one job. This is an effective way of ensuring that creating a budget complements your earnings.

Enlist and total your fixed expenses (savings, debt payments, insurance, and bills)

It is crucial to list all your fixed expenses accurately in your budget. Fixed expenses are those expenses that are constant every month. They include rent, insurance, bills, emergency savings, and debts.

Since fixed expenses are expenses you cannot skip or avoid, they must be paid on time. Having a budget will allow you to put money aside for such expenses. You can subtract the amount needed for the fixed expenses from your monthly income. The remaining amount should be split to fit variable expenses.

Note: When putting money aside for savings, it is crucial to put it in a high-yield savings account. These accounts offer you high rates and low fees. As a result, the money saved in these accounts will have increased by the time you withdraw it.

Enlist and total your variable expenses (living expenses)

Variable expenses are expenses that vary from month to month. In other words, these are expenses that you can ignore if you are on a tight budget. Variable expenses include groceries, gifts, shopping, gym classes, eating out, etc.

An effective way of tracking your finances and evaluating your spending habits is to estimate how much you usually spend on variable expenses. You can estimate your variable expenses by looking at the previous month’s receipts, banking details, and credit card statements.

Break down your expenses into categories

Once you have a list of fixed and variable expenses, you should sort these expenses into categories. Categorizing your expenses allows you to focus on urgent ones and ignore expenses that seem extravagant and irrelevant.

As a result, you will know when, where, and how you spend your money; this is an effective way of ensuring you do not overspend or make unnecessary purchases.

Track your spending habits

Spending habits play a significant role in whether you will attain financial stability and your financial goals. Therefore, evaluating and tracking how and when you spend your money is essential. In addition, tracking your spending habits is an efficient way of abolishing lousy spending habits and incorporating habits that will allow you to gain financial stability.

Consult your financial goals

Before creating a budget, evaluating your spending habits and checking if they correspond with your financial goals is crucial. Your financial goals should be realistic and attainable. Therefore, if you are spending more than you are earning, you need to change your budget and cut back on unnecessary purchases.

Each month should have its financial objectives and budget; this is meant to help you attain your primary financial goal. The more you save with each income, the faster you reach your financial goal.

Reconsider and Adjust

A personal budget is designed to help you spend your money wisely. Therefore, adhering to your spending standards for all categories in your budget is essential. The essence of your budget is to help you not spend below or above set financial standards. Professional financial planners recommend reconsidering and adjusting your budget to complement your needs and earnings. The adjustments should be realistic and complement your lifestyle.

Therefore, you can create a budget that shows the percentage of the amount spent on each category. The percentage benchmark will allow you to reconsider the funds allocated to each category and make the necessary adjustments.

For instance, if you spend 25% of your earnings on food and 15% on housing, you may live below your standards. You can reduce the food percentage to 15%, raise the housing money to 25%, and look for a better and bigger house. Notably, the financial choices and adjustments made should help you save some money and gain financial stability.

While making a personal budget, there are some budgeting strategies that you can use to ensure that you have an effective plan that will help you save money. These three main strategies will help you create an actual budget that works for you.

The budgeting strategies are as follows:

50/30/20 rules

This is the most popular strategy or rule used in budgeting. It is also known as percentage-based budgeting. For example, with the 50/30/20 rule, you will need to divide your spending into three, which are 50% of your income on essentials, 30% on non-essentials, and 20% on savings. However, this strategy is flexible in that it works for you. You can choose how to divide your income and determine which percentage goes to which category on your budget.

Zero-based budgeting

The zero-based budgeting strategy creates budgets that base your current spending on the income made in the previous month. Unlike other budgets that estimate what you will make that month and break down the spending for that month, this strategy creates budgets that focus on the money previously earned to pay for everything needed for the current month. That means every dollar earned is budgeted, and you usually remain with “zero.”

The envelope system

With the envelop system, once your income arrives, you must take it out and split the cash into separate envelopes. Each envelope represents a category in your budget. That means you must use the cash in the envelope for the purposes mentioned on the envelope, and once the money is depleted, that category remains pending until you get paid again. Therefore, it is mainly preferred by people who cannot strictly adhere to a budget.

You can also choose to use apps instead of envelopes, especially if cash is not your best option.

Below are some benefits that come with using the budget templates:

Visualizes your budget

With a template, you can easily visualize your budget, allowing you to control your finances more. This means a template will enable you to create an adequate budget to help you save money, pay or avoid debts and fulfill other financial goals. In addition, you will be able to see your income and identify expenses. That way, you can change your spending habits to avoid overspending while ensuring that you do not under-budget specific budget categories.

Other templates even allow you to graph or chart your data, which makes it easier to understand and interpret your financial situation.

Aids in long-term financial goal planning

A budget template does not only keep track of your current financial plan. It is also vital when it comes to long-term financial planning. A template will enable you to create a personal budget that allocates money to your long-term plans, such as saving up for a house, paying off a debt, or even planning a vacation. It is all about creating a budget that tracks your current spending habits to ensure that you are still focused on achieving your long-term financial plans.

Helps you track minor details

Another importance of using a personal budget template is that it helps you track minor financial details such as variable or minor expenses. Without a budget template, such minor expenses may not be accounted for, and this may cause issues with your finances. It means that the data contained in the budget is not an accurate representation of your current financial situation. Such small mistakes are likely to lead to bad financial decisions in the future. 

There are a few practical tips that you should consider when it comes to preparing your budget. With these budgeting tips, you will quickly plan your finances, saving easily and controlling your spending habits.

These tips include the following:

Set specific goals

A successful budget should work for you and not against you. That means you must set specific goals to ensure that you remain disciplined. Regarding your budget, it is best to have a separate savings account that allows you to track each of your financial goals. This way, you can easily identify what you need to adjust to achieve your goals.

Make changes

A budget is meant to give you an overall outlook on your financial situation. That means you should check your situation and make necessary changes where needed. Remember that it is best to make incremental changes instead of sudden ones. For example, if you overspent in the previous week or month, decrease your spending in that particular category slowly until you reach your intended target. Such changes will improve your financial situation for the better.

Let yourself fail

It is acceptable to let yourself fail when it comes to budgeting. This is an essential tip for individuals who are beginners. Allowing yourself to fail helps you to learn and improve your budget as time continues. Instead of giving up when you fail or face challenges, use the experience to fix the problem.

Re-evaluate what’s important to you

When budgeting, ensure that you evaluate and determine what is important to you. That means you must decide which categories are important and should get more money. This way, you can reduce unnecessary spending under the non-essential categories and focus more on what is important to you. This also ensures you spend your money with no guilt and stay on budget.

Use specific tools

Finally, another tip you should observe when budgeting is using tools. You need to choose specific tools that will make your budgeting process successful. Some tools include a pen and paper, an app, or a customized spreadsheet. Ensure you select a tool that makes it easier for you to budget effectively.

Fact check: Although it all depends on what you earn and how you spend your money, it is vital to have a couple hundred dollars or more for daily expenses. You should have about $100 to $300 cash in your wallet. It is also essential to have about $1,000 back at home or reserved in a safe elsewhere