Super simple budgeting
Welcome to this super-simple, step-by-step guide on how to setup a household budget using only your bank statements, a spreadsheet and a little bit of dedication. I've included built a template for you to use - don't worry it's completely free and really easy to use.
Step 1: It's all in the details
Gather together as much information as you can about your finances. If you use internet banking the easiest way to do this is to download a copy of your most recent statement. It will work just as well with your paper statement if your bank still send it to you in the post. The aim is to get an overall picture of all money coming in and going out of your account.
Step 2: Open the template
Over 59% of people I spoke to before putting this article together weren't able to accurately report how much they had to spend each month. Less than 40% were able to tell me how much they spent last month. So the first thing to do work is work out what you’ve got coming in and what you've got going out. ‘To save time, I’ve created a handy household budgeting spreadsheet for you using Google's free to use, online office software, Google Sheets - you can get it from the link below. If you want to use this, you'll need to download it or copy the file to your own Google Drive. If you've downloaded it, you can also open this file with Microsoft Excel, or Apple's equivalent - 'Numbers', which you might be more familiar with.
Step 3: Categorise your spending
When you open the template you'll see it has a number of sheets. The sheet titled "household budget" is your financial overview. The others are for each of your spending categories. The next stage is go through your bank statements and add each transaction to the relevant category. Once you’ve entered all your transactions the total for each category will automatically be added to the correct cell in your household budget. To note, you only need to enter data in the cells which are blue.
Step 4: Add your income
You now need to enter your sources of income into your household budget. Once complete your overall income for the month will added to the bottom of the page under the Now you have your income and outgoings you’ll be able to see your monthly balance. If you are in the positive that's great, put this away in your savings account for a rainy day? If it is negative you're overspending and should refer to your spending categories to see where you can make cuts. To try and help keep your savings on track the template will give you amount that you should be aiming to save each month. This is 10% of your income. completing this process each month you will soon gain an understanding of where you money is going, and what you can really afford to spend. However the dependancy does lie with you - if you think manually keeping to up to date with your budgeting is unachievable then fear not. There are a growing number of household budget apps available for both iOS and Android devices.