Budget Template: What It Is And How To Create Your Own

Creating a budget is one of the best ways to stay on top of your finances and see where you’re spending your money. Without a budget, it can be hard to keep track of your monthly expenses versus your monthly income. It can also be more difficult to achieve your financial goals, like reducing debt or building an emergency fund.

If you’re ready to take control of your finances, using a budget planner can make it easier to manage your monthly payments and understand how much money you have to save or spend. Let’s explore the way budget planning works and how to create a monthly budget template that’s suitable for you.

What Is A Budget Template?

A budget template is a worksheet or spreadsheet that helps you organize all your living expenses and provides a full picture of how you spend and save your money. This format allows you to list out all your bills and shows how much money you have left over to spend or stick into a savings account. 

Budget templates are also adjustable to meet changing needs if, for example, your income or monthly payments go up or down. Plus, you can customize a budget template to be as simple or as detailed as you wish.

If you’re more likely to use an app than a spreadsheet, you can download Rocket Money to keep track of your budget and spending for you. Rocket Money will track, categorize and highlight where you’re spending so can skip the bank statements and transactions. Simply sign up and connect your financial accounts to get started!

How To Create A Personal Budget Template

A budget template can make it easier to understand your financial profile and achieve your goals. Up next, we’ll look at five important steps to take when preparing your personal budget with this type of budget planner.

1. Establish Your Financial Goals

Before filling out your budget template, it’s important to consider the goals you hope to achieve by organizing your finances. Your reasons for creating a budget template may include building up your savings, reducing credit card debt or paying off your mortgage faster. Or, you might want to use a budget template to simply make managing your bills a bit easier.

Determining your financial goals can also help inform your decision on the type of budget template that’ll benefit you most. For instance, if you want to limit how much you spend on eating out or clothing purchases, you’ll want to be very specific in how you factor these monthly expenses into your budget template.

The more granular you are with what you’re spending your money on, the easier it can be to identify areas where you might be overspending.

2. Calculate Your Monthly Income

If you earn a salary, calculating your monthly income is relatively straightforward – just add your monthly earnings to your budget template. If you work hourly or earn a passive income, perhaps through rental properties, it can be a bit trickier to determine the amount you make every month.

If this is you, mark your budget template with a general estimate or even a lower-than-expected estimate of your monthly income. If you end up making more money in a month than you projected, you can factor this amount into your budget template as extra cash for spending or saving.

3. Identify Your Expenses

Think about all the bills and expenses you’re responsible for each month. Groceries, shopping excursions, loan payments and transportation costs can add up and push you over your budget if you’re not keeping close tabs on your monthly spending.

Go through your bank statements, credit card bills and receipts to identify how and where you’re spending your money. One way to develop a budget is to put these expenses into your template as fixed or variable costs. Fixed expenses are recurring payments, like your mortgage payments, that generally stay the same month over month.

Variable expenses, on the other hand, are costs that tend to vary and change every month. Variable costs can include money spent on groceries or eating out.

Below, you’ll find a few other examples of fixed versus variable costs that you might include in your budget template.

Fixed Expenses

• Mortgage or rent payments
• Car loan payments
• Student loan payments 
• Cell phone and internet bills
• Childcare services
• Car insurance
• Health, disability and/or life insurance

Variable Expenses

• Gas and/or transportation costs
• Groceries
• Home maintenance and repairs
• Health care 
• Dining out
• Entertainment, like movies and concerts
• Costs associated with hobbies
• Shopping

4. Organize Your Budget Template

Once you’ve included your monthly income and expenses, it’s important to organize the template to look and function as you desire. This could mean color-coding different expenses (like fixed versus variable) and listing your expenses from biggest to smallest or by the date in the month they’re due.

Making your budget planner digestible and easy to read can also help you feel more in control of your finances. If the budget template appears streamlined, it can be easier to identify the areas where most of your income is going or you may be overspending and need to cut back.

5. Utilize The Template For Spending And Saving

Once all the necessary information is included in your budget template and you’ve organized it to your liking, it’s time to calculate your monthly spending and saving habits. Maybe you want to abide by the 50/30/20 rule for budgeting, which encourages its adherents to put 50% of their budget toward “needs,” 30% toward “wants” and 20% toward savings.

Or, you might simply want to reduce the amount you spend on dining out or shopping. Allotting less money in your budget template for these expenses and sticking to the plan can help you cut back in these areas and potentially put more money toward credit card payments or in a savings account.

Your budget template gives you a full view of how you spend your money, and it can help you easily identify your spending and saving patterns so you can stay the course that’s required to reach your financial goals.

Benefits Of Preparing A Monthly Budget Template

Benefits of using a personal budget template to track your monthly income and expenses include:

• Separate fixed versus variable expenses: One major advantage of a budget template is that it shows you exactly how much money you’re spending on fixed versus variable expenses. Once payments toward housing, loans, phone bills and other costs are accounted for, the budget template can show you how much money you have left for other expenses and/or savings.
• More easily achieving your financial goals: A budget template can be a helpful tool in your pursuit of certain financial objectives. These may include building an emergency fund, saving for a vacation, paying down credit card debt, saving for a down payment on a house, and so on.
• Make adjustments to suit your budgeting needs: Budget templates are customizable to meet your potentially changing needs. If your monthly income fluctuates or you no longer have to pay a specific expense, for example, you can adjust your budget template to reflect these changes.

Drawbacks of a Monthly Budget Template

• They require manual updating: Unlike a budgeting app that tracks your budget for you, using a monthly budget template will require you to manually update your cash flow and expenses on a monthly basis.
• They can be tedious: Even if you’re up to the task of updating your budget monthly, working with a template is generally much more tedious than using an automated system because you may have to account for expenses and cash from various accounts and financial institutions
• More room for error: While we all have the best of intentions, the more expenses we have, the more likely it is to miss something. That said, take extra care when tracking your expenses or consider using Rocket Money to link all your accounts and track your budget automatically.   

Where To Find A Free Budget Template

Ready to create a budget that works for you? If you prefer to use an app, get started with Rocket Money today to create your custom budget and automatically track your spending across categories.

Prefer the spreadsheet route? Microsoft Excel and Google Sheets both provide free budget template options if you have access to these programs. If you don’t want to use a preset template, you can always use an ordinary spreadsheet through these programs to create a personalized budget template that makes sense for you.

Of course, if you’re looking for a budget template but technology isn’t your friend, you can always use a pen and paper to list out your monthly costs and income, and keep track of your spending the old-fashioned way.

The Bottom Line

Getting your finances in order can seem daunting, but it’s well within reach if you have the right tools at your disposal. A budget template provides an easy, streamlined way to input and view your monthly expenses. It can be incredibly helpful for seeing how you spend your money and identifying areas of your budget where you could be overspending. A budget template can also help you prioritize your monthly expenditures, allowing you to adjust your spending habits to achieve your financial goals.

If you’re ready to take charge of your finances, download the Rocket Money app today.