Budget planning templates4/3/2024 You will need to cover the overspending though, because when your Dining Out “envelope” is empty, you really don’t have the money to dine out. Each category is like an envelope full of cash-you can borrow from one if there was an oversight or indulgence. If you overspend from one category, just cover it by moving money from another category. Don’t turn budgeting into deprivation or a self-imposed source of shame or you’ll quit doing it. Dividing those irregular expenses into monthly amounts so they can accumulate by the time the total cost is due lets you hit the brakes on that financial rollercoaster. ![]() Unexpected expenses aren’t really unexpected, are they? You know your car will need new tires, the holidays come every single year, and you’re probably not going to cancel that Amazon Prime subscription. It will also help you focus and commit to what’s important to you. Why? Because it will bring you peace of mind to be able to see where your money is going and what it needs to do. Step Two: How Much Do You Have?ĭecide how you’re going to spend every dollar you have by assigning each and every dollar to a category. But you’re missing out on the best and most effective way of managing your personal finances if you stop there! Keep going because this is where it gets good. Now, before we get to step two, I want to call out that perhaps when you’ve previously thought of “budgeting” or “making a budget” that you’re done after step one. In YNAB, you can set up spending or savings targets to create an easy visual reminder of how much money you need to allocate, and by when (if applicable) to stay on track. Your budget (and your spending habits) should be a reflection of what matters to you. You’ll have a little more wiggle room when it comes to fun expenses and savings goals, but use those numbers to create a little accountability in your life-is your priority bottomless mimosas at brunch every Sunday or a three month emergency fund? There’s no wrong answer (regardless of what your dad would think). For non-monthly or variable expenses, like Christmas gifts, auto registration, car insurance, or annual subscriptions, divide your estimate by the number of months it takes for that cost to recur so that you can contribute manageable chunks on a monthly basis instead of choking on the whole cost when it comes up. Monthly expenses like rent, cell phone bill, electricity, student loan payments, health insurance, etc. Your budget plan is going to evolve as you journey down the path of financial enlightenment. Don’t get bogged down in this as you’re getting set up the first time-guessing is just fine. It can be a budget app (ahem, YNAB), Excel spreadsheet or Google Sheets, or…a brand new notebook…whatever works best for you.įirst, you need to come up with an estimate of how much each of those expenses will cost. Then add a category at the bottom for “Stuff I forgot to budget for” because let’s be realistic, there’s always stuff like that.
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