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Free and Easy Budget Template

5 Min Read | Apr 26, 2024

No matter what you want to do with your money, it starts with a budget. Because a budget is a plan for your money —you tell it where to go, so you stop wondering where the heck it went.

But if you’ve never budgeted before, or it’s been a while, jumping in can be challenging. You know what can help? A budget template!

There’s nothing like having clear directions to follow and step-by-step blanks to fill in to give you the confidence you need to get going on this budgeting journey. You ready? (Yes, you are.)

Steps for Using Your Budget Template

A budget template (or budget worksheet) is a great way to get everything on paper, right there in front of your eyes. We’ve got three steps to set up that budget and two more to keep it going—each and every month.

Before you dive in, print out your Quick-Start Budget template and open up your online bank account!

Also, heads up: We’re about to mention the Baby Steps a couple of times. This is the proven plan to get ahead with your money—from saving more to paying off debt to building real wealth.

1. List your income.

Do you see the Planned column at the top of your Quick-Start Budget template? That’s where you list out all the money that’s coming in this month. Here are some quick callouts when it comes to this first step:

• Make sure you write in regular paychecks and anything extra, like that side hustle money . (Go you!)
• If you’re married, list out all the income for both of you. (It’s pretty romantic, really.)
• If you’ve got an  irregular income , take a look at what you’ve made the last few months and list the  lowest  amount as this month’s planned income budget line. You can adjust later in the month if you make more. (We’ve got a special irregular income budget template  if you need it.)

2. List your expenses.

Now that you’ve planned for what’s coming in, you need to plan for what’s going out: your giving, saving (depending on what Baby Step you’re on), and spending.

When it comes to all the monthly spending you need to plan for, you’ll see the budget worksheet goes in this order:

• Four Walls —food, utilities, housing and transportation
• Other essentials—like insurance and debt
• Extras—like fun money and that helpful miscellaneous line

(You’ve probably noticed your online bank account is coming in real handy right now.)

As you work through your monthly budget template:

• Skip any lines you don’t need.
• Write in anything you don’t see a spot for.
• Add the planned amounts inside each box.

All right. What’s next?

3. Subtract expenses from your income.

When you do the math on your budget planner sheet, your income minus your expenses should equal zero. We call this the zero-based budget.

No, this does not mean you let your bank account reach zero. Leave a little buffer in there of about $100–300. 

What it does mean is that you’re giving all your money a job—paying the bills and moving you forward on your money goals. Because you work hard for your money, people. And it should work hard for you. Every. Single. Dollar.

What if you don’t hit zero?

• Got money left over? Um, celebrate. This is great! Then put those dollars toward your current Baby Step.
• Got a negative number? Pause. Don’t freak out. It’ll be okay. You just need to cut spending (or increase your income !) until you get to zero.

So, guess what. That’s it for creating the budget. These next two tips will help you stick to it and make it actually work for you.

4. Track your transactions (all month long).

How do you stay on top of your spending? Track. Your. Transactions. That means you’re tracking everything that happens to your money all month long! This is how you keep an eye on your progress and keep from overspending. 

5. Make a new budget (before the month begins).

Your budget won’t change too much from month to month—but no two months are exactly the same. So, create a new budget every single month. Don’t forget month-specific expenses (like holidays or seasonal purchases). And do this before the month starts so you can get ahead of what’s coming your way.

To the Budget Template . . . and Beyond!

Okay, you probably noticed those last two steps aren’t on your monthly budget template. Because the template is a great start. It really is! It helps you level up from budget dreamer to budget planner.

Start budgeting with EveryDollar today!

But once you get those first three steps on paper, it’s honestly way easier to keep up with it all when you’ve got an easy-to-use budgeting app like our personal BBFF (budgeting best friend forever), EveryDollar . Download the app (for free!), plug in all those numbers you organized on your budget template, and take your budget with you. Everywhere. It’s so much better than penciling in every transaction and doing the math yourself or rewriting a budget every month. Trust us.

Here are three more helpful resources before you go:

• If this budgeting flyover zoomed by too quickly, check out our Complete Guide to Budgeting !
• If you’re curious how your spending lines up with recommended budgeting percentages and common averages, you can find that info here.
• And if you if you haven’t yet, download your personal Quick-Start Budget template .

Hey, we’re proud of you for budgeting. It’s seriously the first step to go from where you are with your money to where you want to be. And you’re going great places, one EveryDollar budget at a time!

Did you find this article helpful? Share it!

About the author

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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Top Excel Budget Templates (Free Downloads Included!)

Table of Contents

Why Use an Excel Budget Template?

Step 1: choose the right template, step 2: set up the template, step 3: input your data, step 4: track and update regularly, step 5: analyze your finances, step 6: adjust as needed, 1. clarity and control, 2. smarter spending, 3. financial goal achievement, 4. improved savings habits, 5. reduced stress, step 1: set up your spreadsheet, step 2: format your template, step 3: use formulas for calculations, step 4: customize to your needs.

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Managing your finances effectively is crucial for achieving financial stability and reaching your financial goals. Excel budget templates are powerful tools that can help you track your income, expenses, and savings with ease. Explore our wide range of Free Excel Budget Templates is here to help! Whether you need to manage your personal finances, business budget, or plan for an event, we’ve got you covered. Choose from our variety of templates, including Annual, Business, Event, Family, Monthly, Personal, Project, Simple, Student, and Weekly Budget templates. Simplify your budgeting process and stay on top of your financial goals with our easy-to-use, customizable templates. Download your Free Excel template today and unlock a path to financial freedom!

Simple Budget Template

The simple budget template is designed for simplicity and ease of use, making it perfect for beginners. This easy budget template features a basic layout with separate sections for income and expenses, helping you manage your finances without any advanced Excel skills. By providing automatic calculations for total income, total expenses, and remaining balance, this beginner budget template allows you to gain a clear snapshot of your financial status at a glance. Ideal for individuals or small families, this basic budget Excel tool helps identify areas where you can cut back on spending.

Download Simple Budget Template

Download Simple Excel Budget Template

• Basic layout with separate income and expense sections.
• Automatic calculation of total income, total expenses, and remaining balance.
• Customizable categories for different types of expenses (e.g., utilities, groceries, entertainment).
• Easy to set up and use without any advanced Excel skills.
• Provides a clear snapshot of your financial status at a glance.
• Helps identify areas where you can cut back on spending.

Usage: Ideal for individuals or small families who want a straightforward way to track their monthly finances.

Weekly Budget Template

For detailed short-term financial tracking, the weekly budget template is the perfect tool. This short-term budget planner helps you monitor your income and expenses on a weekly basis, providing a clear picture of your financial status. With customizable categories for detailed tracking and weekly summaries, this weekly expense tracker allows you to maintain consistent financial monitoring. Ideal for individuals or families, this weekly financial planning template helps you set and achieve weekly financial goals. Whether you prefer weekly budgeting or need to manage short-term finances, this detailed weekly budget template is essential.

Download Weekly Budget Tracker

Download Weekly Budget Template

• Sections for weekly income and expenses.
• Customizable categories for detailed tracking.
• Weekly summaries to monitor spending patterns.
• Helps maintain detailed short-term financial tracking.
• Provides a clear overview of weekly financial status.
• Useful for setting and achieving weekly financial goals.

Usage: Suitable for individuals or families who prefer to keep track of their finances on a weekly basis.

Monthly Budget Planner

The monthly budget planner is an excellent tool for detailed financial tracking on a monthly basis. This monthly expense tracker features separate sections for income, expenses, and savings, along with graphical representations of spending categories to help you visualize where your money goes. With a monthly summary that compares total income and expenses to previous months, this Excel monthly budget template helps you maintain consistent financial tracking. Suitable for anyone looking to monitor their spending and savings month by month, this budget spreadsheet is a must-have for monthly financial planning.

Download Monthly Budget Free Template

Download Monthly Budget Plan Template

• Separate sections for income, expenses, and savings.
• Graphical representations of spending categories to visualize where your money goes.
• Monthly summary of total income and expenses with comparison to previous months.
• Helps maintain consistent financial tracking month over month.
• Easy to spot trends in spending and savings.
• Useful for setting and monitoring monthly financial goals.

Usage: Suitable for anyone who needs to monitor their spending and savings month by month.

Annual Budget Template

For those seeking long-term financial planning, the annual budget template is the perfect tool. This yearly budget planner offers a comprehensive view of your income and expenses over an entire year. With monthly breakdowns for detailed tracking and forecasting features for future planning, this long-term budget Excel template helps you set and achieve annual financial goals. Ideal for identifying yearly financial trends and patterns, this yearly expense tracker provides a clear overview of your financial status. This annual financial planning template is essential for anyone looking to manage their finances over a longer period.

Download Yearly Budget  Planner

Download Yearly Budget Plan Template

• Comprehensive annual view of income and expenses.
• Monthly breakdowns for detailed tracking.
• Forecasting features for future planning.
• Allows for long-term financial planning and tracking.
• Helps identify yearly financial trends and patterns.
• Useful for setting annual financial goals and budgets.

Usage: Best for those who want to keep an eye on their finances over the course of a year, including recurring expenses and long-term savings goals.

Personal Budget Template

The personal budget template is a customizable tool designed to fit your unique financial situation. This individual budget planner provides detailed sections for various types of income and expenses, allowing for personalized financial management. With monthly and yearly summary sheets, this personal expense tracker helps maintain a detailed record of your finances. By offering customization based on individual financial goals and needs, this detailed budget template provides a clear overview of your financial status. Perfect for anyone looking to manage their personal income, expenses, and savings goals efficiently.

Download Personal Budget Excel Template

Download Personal Budget Template

• Detailed sections for different types of income and expenses.
• Customizable categories to fit personal needs.
• Monthly and yearly summary sheets.
• Helps maintain a detailed record of your personal finances.
• Allows for customization based on individual financial goals and needs.
• Provides a clear overview of monthly and yearly financial status.

Usage: Perfect for individuals who want to keep track of their own income, expenses, and savings goals.

Family Budget Template

The family budget template is tailored to help households manage their shared finances effectively. This household budget planner includes special categories for family-related expenses such as childcare and groceries, making it an ideal tool for family financial planning. With sections for household income and expenses, this family expense tracker provides a clear overview of the family’s financial status. Graphical summaries help visualize spending patterns, making it easier to set and achieve family financial goals. This shared budget Excel template is perfect for families looking to manage their finances collectively.

Download Free Family Budget Tracker

Download Family Budget Template

• Sections for household income and expenses.
• Special categories for family-related expenses (e.g., childcare, groceries).
• Graphical summaries to visualize spending patterns.
• Helps families manage and track shared expenses.
• Provides a clear overview of household financial status.
• Useful for setting and achieving family financial goals.

Usage: Ideal for families looking to manage their finances collectively and ensure all household expenses are covered.

Student Budget Template

The student budget template is specifically designed to help students manage their limited finances effectively. This budget template for students includes sections for student income, such as part-time jobs and allowances, and expenses like tuition and books. With customizable categories, this student expense tracker fits the unique needs of students. Monthly summaries help track spending and savings, making this student financial planning template an excellent tool for maintaining a clear overview of financial status. Perfect for students, this customizable student budget template helps manage finances and stay within budget.

Download Student Budget Manager

Download Student Budget Template

• Sections for student income (e.g., part-time jobs, allowances) and expenses (e.g., tuition, books).
• Customizable categories to fit student needs.
• Monthly summaries to track spending and savings.
• Helps students manage and track their limited finances.
• Provides a clear overview of student financial status.
• Useful for setting and achieving student financial goals.

Usage: Perfect for students who need to manage their finances and stay within their budget.

Event Budget Template

Planning and managing the finances of events is made easy with the event budget template. This customizable event budget template is suitable for various types of events, ensuring you stay within your budget for any occasion. Detailed sections for event-related income and expenses, along with customizable categories, make this event expense tracker an essential tool for event financial planning. By providing summary sections to monitor your budget, this budget template for events helps you efficiently manage event-specific expenses. Ideal for weddings, corporate gatherings, and other events.

Download Event Budget Planner

Download Event Budget Template

• Detailed sections for event-related income and expenses.
• Customizable categories for different types of events.
• Summary sections to ensure you stay within your budget.
• Helps manage event-specific expenses efficiently.
• Provides a clear overview of event finances.
• Useful for staying within budget for various types of events.

Usage: Great for anyone planning an event, from weddings to corporate gatherings, to keep track of all related expenses.

Project Budget Template

The project budget template is designed to help manage the financial aspects of projects, big or small. This customizable project budget template includes sections for project income and expenses, ensuring your project stays on budget. With tracking and summary features, this project expense tracker provides a clear overview of project costs. Ideal for project managers or freelancers, this project financial planning template helps keep a close eye on project-specific finances. Whether you are handling a small project or a large initiative, this budget template for projects is an invaluable tool.

Download Project Budget Manager

Download Project Budget Template Excel

• Sections for project income and expenses.
• Customizable to fit different types of projects.
• Tracking and summary features to monitor project budget.
• Helps manage project-specific finances efficiently.
• Provides a clear overview of project costs.
• Useful for ensuring projects stay within budget.

Usage: Ideal for project managers or freelancers who need to keep a close eye on project costs.

Business Budget Template

Designed specifically for small businesses, the business budget template helps manage business finances effectively. This small business budget planner includes sections for business income, expenses, and profits, making it an excellent tool for business financial planning. Customizable to fit various business needs, this business expense tracker provides detailed financial summaries and forecasts. Ideal for small business owners, this budget template for businesses offers a comprehensive view of the business’s financial status. With this tool, managing and tracking business finances becomes efficient and straightforward.

Download Business Budget Template

• Sections for business income, expenses, and profits.
• Customizable to fit various business needs.
• Detailed financial summaries and forecasts.
• Helps manage and track business finances efficiently.
• Provides a clear overview of business financial status.
• Useful for setting and achieving business financial goals.

Usage: Best for small business owners who need a comprehensive tool to manage their business finances.

Using an Excel budget template can make managing your finances much simpler and more efficient. Whether you’re an individual, a family, a student, or a business owner, there’s a template out there that can meet your needs. Download one of these top templates and start taking control of your finances today!

Imagine navigating a road trip without a map. Budgeting is similar. Without a clear plan, your finances become a confusing, potentially expensive journey. A budget template acts as your GPS, providing structure and direction. Excel budget templates offer numerous advantages for managing your finances:

• Ease of Use: Excel’s user-friendly interface makes it easy to input and organize financial data.
• Customization: Templates can be tailored to fit your unique financial situation.
• Automation: Excel’s formulas and functions automate calculations, saving time and reducing errors.
• Visualization: Charts and graphs help visualize your financial data, making it easier to identify trends and make informed decisions.
• Accessibility: Excel is widely available and compatible with various devices, allowing you to access your budget anytime, anywhere.
• Formulas Save Time: Automate calculations for a faster and more accurate budgeting experience.
• Data Visualization: Charts and graphs make your spending trends clear and easy to understand.
• Organization Powerhouse: Excel keeps your finances neatly organized in one place.

How to Use Excel Budget Templates

Using Excel budget templates can significantly simplify the process of managing your finances. Whether you’re tracking personal expenses, planning an event, or managing a business, these templates provide a structured way to monitor income and expenses. Here’s a step-by-step guide on how to use Excel budget templates effectively:

Identify Your Needs: Determine what type of budgeting you need (e.g., personal, family, event, business). Download the Template: Visit a trusted source like Microsoft Office Templates or a reputable financial website to download the template that suits your needs.

Open the Template: Open the downloaded Excel budget template on your computer. Customize Categories: Adjust the income and expense categories to match your specific financial situation. Most templates allow you to add, remove, or rename categories.

Enter Income: Start by entering all your income sources. This could include salary, freelance work, investments, or any other sources of income. List Expenses: Input your expenses in the corresponding categories. Be as detailed as possible, including both fixed expenses (rent, utilities) and variable expenses (groceries, entertainment).

Monitor Regularly: Make it a habit to update the template regularly with new income and expenses. This could be done daily, weekly, or monthly, depending on your preference. Review Summaries: Use the summary sections to review your financial status. Look at the total income, total expenses, and the remaining balance to understand your financial health.

Identify Trends: Use the graphical representations and summary sections to identify spending patterns and trends. This can help you make informed decisions about where to cut costs or how to allocate more funds to savings. Set Goals: Based on your analysis, set realistic financial goals. This could be saving a certain amount each month, reducing discretionary spending, or planning for a major purchase.

Modify Categories: If you find that your categories are too broad or too narrow, adjust them to better reflect your financial activities. Revisit Goals: Regularly revisit your financial goals and adjust them based on your current financial situation. If you achieve a goal, set a new one to keep yourself motivated.

Importance of Budgeting

Budgeting is a crucial aspect of financial management that can significantly impact your financial well-being. It involves planning and tracking your income and expenses to ensure you are living within your means and working towards your financial goals. Here are some key reasons why budgeting is essential:

Gain Insight: Budgeting gives you a clear picture of where your money is going. It clarifies your income and expenses, giving you control over your money. By tracking your expenses and income, you can see exactly how much you are spending and on what, allowing you to make informed financial decisions.

Avoid Overspending: A budget helps you avoid overspending by keeping your expenses in check. By setting limits for different categories, you can prevent unnecessary expenditures and ensure you have enough funds for essential needs.

Prioritize Needs Over Wants: With a budget, you can prioritize your needs over wants. This helps curb impulse purchases and avoid unnecessary debt. By allocating funds to essential expenses first, you can ensure that your basic needs are met before spending on discretionary items.

Avoid Debt: Budgeting helps you live within your means, reducing the likelihood of relying on credit cards or loans for day-to-day expenses. This proactive approach prevents the accumulation of new debt and promotes long-term financial stability.

Set and Reach Goals: Whether you’re saving for a vacation, a new car, a home, or retirement, a budget helps you set realistic financial goals and create a plan to achieve them. It helps you track progress towards these goals, ensuring you make steady progress.

Emergency Fund: Budgeting helps you build an emergency fund, providing a financial cushion for unexpected expenses like medical bills, car repairs, or job loss. Having this safety net can reduce stress and prevent you from falling into debt.

Consistent Savings: Budgeting enables you to set aside money regularly for savings. A budget ensures consistent allocation towards your savings goals. By treating savings as a fixed expense, you can ensure consistent contributions to your savings account, helping you build wealth over time.

Long-term Planning: A budget helps you plan for long-term financial goals such as retirement, education, or major purchases. It allows you to allocate funds strategically and work towards these goals systematically.

Peace of Mind: Knowing that you have a plan for your finances can significantly reduce financial stress. A budget provides clarity and structure, helping you feel more in control of your financial situation. Knowing every penny’s purpose brings peace of mind.

Preparedness: Being prepared for both regular and unexpected expenses can alleviate anxiety. Budgeting ensures you are financially prepared for various scenarios, providing peace of mind and stability.

How to Create an Excel Budget Template

Creating an Excel budget template is straightforward. Follow these steps to build a customized template that suits your financial needs:

Open a new spreadsheet in Excel. Title your sheet “Excel Budget Template” and create the following columns:

• Date: The date of the transaction.
• Category: The type of income or expense (e.g., Salary, Groceries, Rent).
• Description: A brief description of the transaction.
• Budgeted Amount: The planned amount for each category.
• Actual Amount: The actual amount spent or received.
• Difference: The difference between the budgeted and actual amounts.
• Notes: Any additional notes or comments.

• Difference: =D2-E2
• Total Income: = SUM (D2:Dn) for all income rows
• Total Expenses: =SUM(E2:En) for all expense rows
• Net Total: =Total Income – Total Expenses

Adjust the categories and descriptions based on your financial situation. Add any specific items or recurring expenses that are unique to your budget.

Tips for Effective Budgeting with Excel

• Be Consistent: Update your budget regularly to ensure accuracy.
• Review Regularly: Analyze your budget at the end of each month to identify trends.
• Adjust as Needed: Modify your budget based on actual expenses and income.
• Use Conditional Formatting: Highlight important data and trends with Excel’s conditional formatting features.
• Backup Your Data: Regularly save and backup your Excel files to prevent data loss.

Using an Excel budget template is a powerful way to take control of your finances. With the ability to customize, automate, and visualize your financial data, Excel makes budgeting easier and more effective. Download our free templates above and start managing your finances today.

Recommended articles:

• ProjectManager.com: How to Make a Project Budget?
• Income and Expenses Tracking Templates : Check our templates for tracking Income and Expenses
• Smartsheet.com: Free Budget Templates

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• Financial Planning

Basic Monthly Budget Worksheets Everyone Should Have

Use these worksheets to track spending, saving, and monthly balances

How To Use Monthly Budget Worksheets

How to complete monthly budget worksheets, monthly budget worksheet templates, what to do after making a budget, frequently asked questions (faqs).

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Budgets help you plan your monthly spending to achieve your goals, whether those are trying to pay down debt, accumulate cash for a new car, or put away more in your savings account. Without a budget, money may sprint through your account as if it’s a revolving door.

Key Takeaways

• Budgets can help you track, plan, and watch spending to achieve financial goals.
• Budget worksheets offer a way to review ingoing and outgoing amounts in black and white.
• As you work with budget worksheets, you can adjust your budget as you refine your numbers.

Budgeting has also become increasingly popular in recent years; in 2022, 86% of respondents to a Debt.com survey said they tracked income and expenses. Before the COVID-19 pandemic, 70% of respondents did so. Almost one-third of respondents indicated they maintained a budget with spreadsheets.

Download and copy The Balance’s Spending Tracker Worksheet and Monthly Budget Income and Expenses Calculator .

Find out more about how to set up and fill in a budget worksheet template. Use it for a month or so to see how it works for you.

Budgets can help you manage your finances daily, monthly, and over the long term. You’ll gain insights into how you’re spending and saving money. Budgeting worksheets can help reconcile how much you planned to spend with how much you actually spent. There may be surprising expenses you frequently forget about or that add up fast despite being smaller amounts.

A budget could reveal areas of impulse buying, lack of savings, unused subscriptions, or other financial mismanagement signs, such as repeated late-bill fees. A budget worksheet can help you decide your priorities and even change your spending habits over time. If you get into the habit of using a budget worksheet, you may notice that you spend less and save more. You’ll be able to use that extra money to pay off debts, add to your emergency fund, or invest money for retirement.

Various budgeting approaches exist . The 30-day budget is the budgeting worksheet approach we’ll cover here. Reviewing income and expenses a month at a time is a manageable solution for many people.

Other ways to calculate your budget are with apps, pen and paper, or your financial institution’s budgeting tools. However, a simple worksheet doesn’t require bank logins, is accessible from multiple locations, can help perform automatic calculations, and needs just the right amount of maintenance.

A good “rainy day fund” amount is around three to six months’ of living expenses , but any savings is a great start. Keep your emergency savings in a bank account paying higher interest rates.

To complete monthly budget worksheets, gather your income information (from all sources) and your spending habits for the past month or so. Use your bank account statements, credit card statements, and other monthly income and expense records.

You also can use a Spending Tracker Worksheet (see above for the download link) to track your spending over a month. Before you use it, make a copy first:

• Click “File”
• Click “Make a copy”
• When the “Copy document” window pops up, type in a new name for your worksheet, such as “Emma’s Tracker.”
• Ensure you’re saving it to a folder you can access, then click the green button that reads “Make a copy.”

A step-by-step guide to making a budget can offer more details, including what to do if you receive variable incomes from gig or freelance work.

Do not enter any numbers into the worksheet cells tinted with pink, blue, or green—those cells contain formulas that shouldn’t be altered.

First, copy the Monthly Budget Income and Expenses Calculator (see above for the download link) described in “How to Complete Monthly Budget Worksheets,” above. Following these steps gives you a worksheet you can edit. Then work through the tabs in the worksheet linked above.

Monthly Income Calculator

A good first step is to calculate your monthly income. On the first tab of the worksheet, enter the income you expect to receive from all sources in the “Gross Income” category in the “Projected” column. Enter any deductions from your paycheck in the “Taxes Withheld and Payment Deductions” section and the “Projected” column.

You might base this on your previous month’s income—but if you’re expecting to work more or fewer hours this month, the budget worksheet is flexible enough to reflect fluctuations.

In the “Total Take-Home Pay,” you’ll see your projected net income.

Monthly Expenses Calculator

Click on the “Monthly Expenses Calculator” tab. There, enter your budgeted amount for each category in “Projected.” Expenses could be based on past spending habits you gather from account statements or your spending tracker.

Ensure you’re only entering amounts not already deducted from your paycheck. For example, if your health insurance premium is deducted from your paycheck, enter that on the “Monthly Income Calculator” tab, not as a monthly expense.

Feel free to add or delete categories based on your spending priorities and lifestyle. For example, you might not spend money on coffee or alcohol. Or you might pay alimony, but not have a pet to care for.

Monthly Surplus & Shortages Calculator

In the “Surplus & Shortages” tab, you’ll see how much money you project you’ll end up with at the end of the month. If you find your expenses are more than your income, look for ways to cut back, or earn more money before you find yourself in serious debt. If your income is more than your expenses, congratulations—you have money to stash in your savings.

At month’s end, review the amounts you entered for each tab and enter what you actually spent. Did you vastly overestimate some categories and underestimate others?

Some amounts will mostly stay the same, change slowly over time, or only change once a year. These fixed expenses might include mortgage, rent, health insurance, and car loan payments. Other expenses could fluctuate according to season, usage, or choices; for example, water bills, groceries, or gas. Some are required, while others, like a streaming service, might be optional, discretionary expenses.

You can continue to use the monthly expenses tracker to track spending through the month and keep tabs on big buys or categories you need to add (or delete). Some people find it easier to manage a budget when breaking down spending by week.

Use a budget to help shape your financial goals and vice versa. For example, you may decide you want to use your budget to help you get out of debt, buy a home, or save up for your kids’ future education. If you want to save money for a specific goal, you may need to “pay yourself first” with even $5 or $10 into a savings account to ensure money goes toward your goal every month—even if that means eating out less or spending less on groceries.

Take the opportunity to analyze your spending habits. Perhaps you budgeted only $100 per month for gas. At month’s end, you discover that you spent $150. If you ponder the reason for the difference, you may find it was due to inflation, big trips, or you just underestimated your gas usage. This could help you plan for next month’s gas budget and help answer why you’re chronically short on cash.

Review your budget at the end of each month and adjust for the coming month. Within a few months, you may be spending less and saving more.

What is a balanced budget?

A balanced budget is one where your income and expenses are balanced evenly, without too much or too little left over. One way to implement a balanced budget is with a zero-based budgeting approach , which aims to assign every dollar of your income to an expense, savings, or spending.

How can budgeting impact your overall wealth?

Budgeting can increase your overall wealth through:

• Creating limits on your spending
• Offering a savings path toward your financial goals
• Establishing or accelerating debt repayment
• Boosting emergency savings
• Initiating investing or retirement savings

A financial cushion can help prevent debt from building up or unexpected expenses from wiping out your reliable spend-and-save habits. Ideally, budgeting can help build generational wealth .

Debt.com. “ Americans Are Budgeting More Than Ever .”

University of Utah Cooperative Extension. “ Balancing the Budget, Fitting It All In .” Page 3.

Consumer Financial Protection Bureau. “ Budgeting: How To Create a Budget and Stick With It .”

Rutgers University Extension. “ The Benefits of Budgeting .”

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How to Budget Money in 5 Steps

Bev O'Shea is a former NerdWallet authority on consumer credit, scams and identity theft. She holds a bachelor's degree in journalism from Auburn University and a master's in education from Georgia State University. Before coming to NerdWallet, she worked for daily newspapers, MSN Money and Credit.com. Her work has appeared in The New York Times, The Washington Post, the Los Angeles Times, MarketWatch, USA Today, MSN Money and elsewhere. Twitter: @BeverlyOShea.

Lauren Schwahn is a writer at NerdWallet who covers credit scoring, debt, budgeting and money-saving strategies. She has contributed to the "Millennial Money" column for The Associated Press. Her work has also been featured by USA Today, MSN, The Washington Post and more. Lauren has a bachelor’s degree in history from the University of California, Santa Cruz. She is based in San Francisco.

Kathy Hinson leads the Core Personal Finance team at NerdWallet. Previously, she spent 18 years at The Oregonian in Portland in roles including copy desk chief and team leader for design and editing. Prior experience includes news and copy editing for several Southern California newspapers, including the Los Angeles Times. She earned a bachelor’s degree in journalism and mass communications from the University of Iowa.

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If you have take-home pay of, say, $3,000 a month, how can you pay for housing, food, insurance, health care, debt repayment and fun without running out of money? That’s a lot to cover with a limited amount, and this is a zero-sum game.

The answer is to make a budget.

What is a budget? A budget is a plan for every dollar you have. It’s not magic, but it represents more financial freedom and a life with much less stress. Here’s how to set up and then manage your budget.

Get a custom financial plan and unlimited access to a Certified Financial Planner™

NerdWallet Advisory LLC

How to budget money

Calculate your monthly income, pick a budgeting method and monitor your progress.

Try the 50/30/20 rule as a simple budgeting framework.

Allow up to 50% of your income for needs, including debt minimums.

Leave 30% of your income for wants.

Commit 20% of your income to savings and debt repayment beyond minimums.

Track and manage your budget through regular check-ins.

It’s easy to get overwhelmed by the many details included in the budgeting process. Here are five steps to follow.

Step 1: Figure out your after-tax income : If you get a regular paycheck, the amount you receive is probably it, but if you have automatic deductions for a 401(k), savings, and health and life insurance, add those back in to give yourself a true picture of your savings and expenditures. If you have other types of income — perhaps you make money from side gigs — subtract anything that reduces it, such as taxes and business expenses.

Step 2: Choose a budgeting system : A budgeting system is a framework for how you budget. Everyone has different habits, personality types and approaches to managing money, and there are systems that can fit your lifestyle. Any budget must cover all of your needs, some of your wants and — this is key — savings for emergencies and the future. Budgeting plan examples include the envelope system and the zero-based budget, and the 50/30/20 budget, which we’ll discuss more below.

Step 3: Track your progress: Record your spending or use online budgeting and savings tools .

Step 4: Automate your savings: Automate as much as possible so the money you’ve allocated for a specific purpose gets there with minimal effort on your part. If your employer permits, set up automatic payments from your paycheck to your emergency savings , investment and retirement accounts. An accountability partner or online support group can help, so that you're held accountable for choices that blow the budget.

Step 5: Practice budget management: Your income, expenses and priorities will change over time, so actively manage your budget by revisiting it regularly, perhaps once a quarter. If you're struggling to stick with your plan, try these budgeting tips .

Try a simple budgeting plan

We recommend the popular 50/30/20 budget to maximize your money . In it, you spend roughly 50% of your after-tax dollars on necessities, including debt minimum payments. No more than 30% goes to wants, and at least 20% goes to savings and additional debt payments beyond minimums.

We like the simplicity of this plan. Over the long term, someone who follows these guidelines will have manageable debt, room to indulge occasionally, and savings to pay irregular or unexpected expenses and retire comfortably.

The 50/30/20 budget

Find out how this budgeting approach applies to your money.

Your 50/30/20 numbers:

Necessities

Savings and debt repayment

Do you know your “want” categories?

Become a NerdWallet member to track your monthly spending trends, including how much you're allocating to needs and wants.

Allow up to 50% of your income for needs

Your needs — about 50% of your after-tax income — should include:

Basic utilities.

Transportation.

Minimum loan and credit card payments. Anything beyond the minimum goes into the savings and debt repayment category.

Child care or other expenses you need so you can work.

If your absolute essentials overshoot the 50% mark, you may need to dip into the “wants” portion of your budget for a while. It’s not the end of the world, but you'll have to adjust your spending.

Even if your necessities fall under the 50% cap, revisiting these fixed expenses occasionally is smart. You may find a better cell phone plan , an opportunity to refinance your mortgage or an opportunity for less expensive car insurance . That leaves you more to work with elsewhere.

Leave 30% of your income for wants

Separating wants from needs can be difficult. In general, though, needs are essential for you to live and work. Typical wants include dinners out, gifts, travel and entertainment.

It’s not always easy to decide. Are restorative spa visits (including tips for a massage ) a want or a need? How about organic groceries? Decisions vary from person to person.

If you're eager to get out of debt as fast as you can, you may decide your wants can wait until you have some savings or your debts are under control. But your budget shouldn't be so austere that you can never buy anything just for fun.

Every budget needs wiggle room — maybe you forgot about an expense or one was bigger than you anticipated — and some money to spend as you wish. If there's no money for fun, you'll be less likely to stick with your budget.

Commit 20% of your income to savings and debt paydown

Use 20% of your after-tax income to put something away for the unexpected, save for the future and pay off debt balances (paying more than minimums). Make sure you think of the bigger financial picture; that may mean two-stepping between savings and debt repayment to accomplish your most pressing goals.

Determine priorities in your budget

When budgeting, it can be difficult to determine which items are most urgent. Should you prioritize your credit card debt, student loan repayments or retirement savings? Here is a list of potential priorities from most to least urgent.

Many experts recommend you try to build up several months of bare-bones living expenses. We suggest you start with an emergency fund of at least $500 — enough to cover small emergencies and repairs — and build from there.

You can’t get out of debt without a way to avoid more debt every time something unexpected happens. And you’ll sleep better knowing you have a financial cushion.

Get the easy money first. For most people, that means tax-advantaged accounts such as a 401(k). If your employer offers a match, contribute at least enough to grab the maximum. It's free money.

Why do we make capturing an employer match a higher priority than debt? Because you won’t get another chance this big at free money, tax breaks and compound interest. Ultimately, you have a better shot at building wealth by getting in the habit of regular long-term savings.

You don’t get a second chance at capturing the power of compound interest . Every $1,000 you don’t put away when you’re in your 20s could be $20,000 less you have at retirement .

Once you’ve snagged a match on a 401(k), if you have any extra cash available, go after the toxic debt in your life. High-interest credit card debt, personal and payday loans, title loans and rent-to-own payments all carry interest rates so high that you end up repaying two or three times what you borrowed.

If either of the following situations applies to you, investigate options for debt relief , which can include bankruptcy or debt management plans .

You can't repay your unsecured debt — credit cards, medical bills, personal loans — within five years, even with drastic spending cuts.

Your total unsecured debt equals half or more of your gross income.

Once you’ve knocked off any toxic debt, the next task is to get yourself on track for retirement. Aim to save 15% of your gross income; that includes your company match, if there is one.

If you’re young, consider funding a Roth individual retirement account after you capture the company match. Once you hit the contribution limit on the IRA, return to your 401(k) and maximize your contribution there.

Regular contributions can help you build up three to six months' worth of essential living expenses — not your full budget, just the must-pay basics. You shouldn’t expect steady progress because emergencies happen, and that's when you should pull money from this fund. Just focus on replacing what you use and increasing your savings over time.

These are payments beyond the minimum required to pay off your remaining debt .

If you’ve already paid off your most toxic debt, what’s left is probably lower-rate, often tax-deductible debt (such as your mortgage). Tackle these when the more-basic goals listed above are covered.

Any wiggle room you have here comes from the money available for wants or from saving on your necessities, not your emergency fund and retirement savings.

Congratulations! You’re in a great position — a really great position — if you’ve built an emergency fund, paid off toxic debt and are socking away 15% toward a retirement nest egg. You’ve built a habit of saving that gives you immense financial flexibility. Don’t give up now.Consider saving for irregular expenses that aren’t emergencies, such as a new roof or your next car. Those expenses will come no matter what, and it’s better to save for them than borrow. You may also choose to use any disposable income you have to build wealth faster by putting more money in your retirement pot.

WATCH TO LEARN MORE ABOUT BUDGETING

Start by determining your take-home (net) income, then take a pulse on your current spending. Finally, apply the 50/30/20 budget principles : 50% toward needs, 30% toward wants and 20% toward savings and debt repayment.

The key to keeping a budget is to track your spending on a regular basis so you can get an accurate picture of where your money is going and where you’d like it to go instead. Here’s how to get started: 1. Check your account statements. 2. Categorize your expenses. 3. Keep your tracking consistent. 4. Explore other options. 5. Identify room for change. Free online spreadsheets and templates can make budgeting easier.

Start with a financial self-assessment. Once you know where you stand and what you hope to accomplish, pick a budgeting system that works for you. We recommend the 50/30/20 system, which splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.

Start by determining your take-home (net) income, then take a pulse on your current spending. Finally, apply the 50/30/20

budget principles

: 50% toward needs, 30% toward wants and 20% toward savings and debt repayment.

The key to keeping a budget is to

track your spending

on a regular basis so you can get an accurate picture of where your money is going and where you’d like it to go instead. Here’s how to get started: 1. Check your account statements. 2. Categorize your expenses. 3. Keep your tracking consistent. 4. Explore other options. 5. Identify room for change. Free

online spreadsheets and templates

can make budgeting easier.

Start with a financial self-assessment. Once you know where you stand and what you hope to accomplish, pick a

budgeting system

that works for you. We recommend the 50/30/20 system, which splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.

» LEARN: Tips for Canadians on how to budget

on Capitalize's website

Want to talk to an expert about setting a budget?

Discuss your finances on a one-time call for $99 or subscribe to a full financial planning membership for just $30/month with a six-month commitment.

14 Personal Finance Project Examples & Ideas

By: Author Amanda L. Grossman

Posted on Last updated: June 21, 2024

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Want to introduce a money project to your students? Check out these personal finance project examples for middle and high school.

Every so often, I find a fun and interesting personal finance project example that I think should be passed on so that other educators can use it.

So today, I thought it’d be helpful to highlight them all in an article (that I update periodically with new ideas and examples as they come to me).

You can use these to round out your financial literacy class with an overall project due at the end of the semester, OR, squeeze one of these projects in for students to work on mainly at home if you don’t have a dedicated fin lit class.

Perhaps you are into project-based learning, and one of these could be the perfect anchor to your entire semester.

There are lots of uses!

Personal Finance Project Examples

Below, you’ll find a mix of actual personal finance project examples from real classrooms and schools, as well as ideas for money projects that haven’t been done before.

I hope you get inspired.

Mr. Brennan’s Personal Finance Project

This teacher has created a personal finance project geared towards financial independence that accounts for 20% of his student’s grades in Economics.

Students are tasked with making a budget, finding an apartment, filling out a rental application, looking into utilities, meal planning, and all the things that go into getting that first apartment on their own.

He’s got a Part II, with tons of lessons around the theme of Staying Within Your Budget.

Project-Based Learning Finance Project

What a cool idea – in this PBL, students meet different families (adults pretending to be clients) and see what their financial needs and desires are.

They interview them to find out more about their lives, and what they’re looking for. They also get a printout of their financial situation.

It’s like they’re playing financial planner (in fact, the teacher had a financial planner come in to talk about her job and go through examples)!

11 Personal Finance Projects from Atlanta Fed (PDF)

The Atlanta Fed has this great resource with 10 different personal finance projects to use throughout the year (rubric included).

And…it’s available for free!

Author Julie Kornegay suggests that you have students complete 10 projects, each worth 20 points. Have them create a three-ring binder with each of their projects, and make it a large part of their final grade.

Working through each of the following projects will give your students a financial strategy to take with them:

• Expense tracking
• Setting financial goals
• Balance sheets and cash flow statements
• Creating a budget
• Credit reports
• Purchasing a vehicle
• Saving and investing for the long-term
• Important financial documents
• Retirement savings
• Insurance inventory

Hint: she also gives several tips for how to keep everyone feeling safe doing these projects – since they’ll be sharing sensitive information at some point.

Youth Cash Transfer Program

40 students inside Rooted School Indianapolis were chosen to receive $50/week, for 40 weeks (adding up to $2,000 in total).

And here’s the kicker: they’re allowed to spend it however they’d like.

Talk about a bit of a fish bowl experiment, where teens can practice both receiving money and spending money without huge real-world consequences.

To be honest, I’m following this study because I want to see how things turn out ( researchers are going to be monitoring and studying the results of this program ).

Build a Classroom Food Pantry

Here’s a school that allowed a student to create and run a food pantry (as part of his Eagle Scout service project)…and now it runs continually as a grocery store experience for students that helps the community.

Unfortunately, there’s not a lot of information on this. But, could be a great project to develop at your own school now that you have the idea.

Psst: Want more? Don’t forget to check out these budget project for middle school students , and budget projects for high school students.

Mr. Saulino’s Personal Finance Webquest Project

If you’re in Mr. Saulino’s Social Studies course, then you’ll be completing a project called Personal Finance Webquest.

Each student pretends they are 22 years old, and they have $7,000 in their savings account to spend, or not spend, as they wish.

Students are required to stay within their budget while accomplishing the following:

• find an occupation
• set up and maintain a budget based on your income
• rent and furnish an apartment or purchase a home
• purchase a car
• set up an investment portfolio

There are links provided in each section to help guide students in finding the information they need to complete their tasks.

Personal Finance Culminating Project

One teacher found her students were super bored with personal finance topics, so she decided to change things up.

Students need to pick 5 topics from a big list and write a brief post about them (150-300 words) or a podcast summary.

Written pieces were posted to a classroom blog, and the quiz for the unit was for each student to read 5 others’ blogs, and summarize what they learned.

Apparently, this was quite the hit!

Included in that article are the Personal Finance Culminating Assignment, and Investigations Rubric.

Gen Z Money Project

Based on CNBC’s Millennial Money video series, this high school teacher developed an after-school personal finance project where students plan what their life looks like at age 30.

Students complete a:

• Futures Thinking Activity
• Personal Values Activity
• Vision Board Activity
• Budget and Salary Activity
• Career Activity

And then students presented everything using Google Slides presentations.

Do you have a market day at your school? You know, where students come up with an idea for what to make or do in order to sell it to their peers, the community, etc. on a Market Day at the school?

While it’s not entirely a personal finance project – it’s got more to do with entrepreneurship and running a business – I still thought it was worth mentioning here.

I've got an article on  22 Simple Market Day Ideas , and it's gotten a lot of attention.

My Pet Plan Project

Most kids, at some point, want to own a pet.

Take this desire, and let them learn some critical money lessons with it.

Have each of your students come up with a plan for buying and maintaining a pet for six months.

They get to decide things like:

• What type of pet to buy
• Where to buy their pet
• What accessories to purchase
• A feeding plan for their pet with costs

My First Car: The First Six Months

Many tweens and teens are looking to buy their first car in the coming few years.

But, how exactly are they supposed to do that? What are the steps? What are the estimated costs?

Then, how much does it cost to run their new car for the first six months?

You can also have them do things like calculate the cost of buying a new car each year for three years, versus paying one-off and riding it another 7 years (also, opportunity costs).

Here's how to save up for a car as a teenager .

Buyer’s Remorse Project

Have your students save each of their receipts for one month leading up to this project (you can hand them a special envelope to remind them to do it).

When one month is up, have students do things like:

• Fill in a spending ledger
• Look at the totality of their spending over the entire period
• Divide it up by needs vs. wants
• Figure out percentages spent on needs vs. wants
• Figure out satisfaction for each purchase
• Categorize by days of week/types of stores to pinpoint/open their eyes to some of their spending habits
• Go through a tradeoff exercise
• Run through a lesson on money values – shuffle anonymous sheets up and hand them out to ask others what their satisfaction level would be for the various spending (to find out that everyone prioritizes and values their money differently)
• Have them read through these 7 smart ways to spend your graduation money

Ask students things like “Why might someone else’s buyer’s remorse not be yours? Did you have more buyer’s remorse when it was your money spent, than looking at how someone else spent their money? Why do you think that is?

I hope I've inspired you with some of these personal finance project examples. And I'd love to hear your own – please share in the comments to help other educators with ideas.

• Latest Posts

Amanda L. Grossman

Latest posts by amanda l. grossman ( see all ).

• 9 Simple Money Projects for Kids & Preteens (to Master Money) - June 22, 2024
• The Earn Your First $100 Challenge (Free Printable Included) - June 21, 2024
• The Factory Tour Entrepreneur Project (Free Printable) - May 30, 2024

How to Make a Budget Plan in 3 Steps [+ personal budget sheet template]

A well-planned and managed budget is the secret to achieving your big financial goals. We break down the process of creating your own personal budget step-by-step, with a free downloadable personal budget template.

Cassidy Nydahl

Cassidy leads the Growth Team at Franc. When she's not thinking strategy, she's trying out new recipes, writing, and planning her next travel adventure.

5 Financial Apps to Help You Manage your Money in 2024

Why & How to Set Financial Goals

Should I Invest in My Child’s Name or Mine?

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A well-managed personal budget plan can be the key to helping you control your spending (and saving) and reaching your goals for the future. Here’s the 3-step formula for setting up a budget for success, and how to maintain it so it actually works for you.

How to make a personal budget plan in 3 easy steps

Step #1: calculate your net income 🔢.

Your total net income is the total salary and any other income streams you have, minus any of the deductions or company contributions. It’s slightly different if you’re employed or self-employed:

How to calculate net income if you’re employed:

If you work for a South African employer, your net income is the cash amount you receive in your account on payday.

It’s calculated as:

(Total cost to company) – (total deductions + contributions + fringe benefits) = net pay

Your total cost to company would include your basic salary and any bonuses, commission, or overtime, as well as various deductions and non-cash contributions that your employer pays on your behalf before it’s paid to you.

Here are some examples of deductions vs company contributions :

If your employer offers fringe benefits, too – like meals – this would also be part of your total cost to company.

Luckily, your employer should lay this all out in your payslip, where you can easily find your net income every month.

How to calculate net income if you’re self-employed or a freelancer:

If you’re a freelancer, you’ll likely be paying provisional tax once or twice a year. To make sure you have enough to settle your tax bill come SARS filing, tax consultants recommend saving or investing 25% of your income received every month.

Here’s a simple way of understanding your net income as a freelancer:

(Total invoiced income received) X 75% = net income*

Step #2: Track your spending 🔍

Where does all your money go every month, and why do you never have enough left over to save and invest? These are the questions you’ll likely answer when you start accurately tracking your spending.

To budget effectively, not only should you include planned income and expenses for the future, but also actual income and spending in the past to help you know what your current spending habits look like.

Once you know that, and which of those expenses are set (fixed), or which can be reduced or removed completely (variable), you can start to find extra cash to save towards short- and long-term goals.

Here’s how to identify fixed vs. variable expenses

How to go about tracking your spending

• Download our personal budget sheet template and gather 3-6 months’ bank statements.
• For each month, create a column and fill in the actual spend for that month under each of the categories that apply to you (like entertainment, rent, vehicle or insurance).
• Create 3-6 more columns – one for each new month – after these, where you’ll use the ‘actual’ numbers to roughly budget spending for the upcoming months.

Step #3: Set your financial goals 🥅

Here comes the exciting part. 🤩

Now that you know what your income and spending actually looks like, and how you can adjust it to help save and invest more every month, you can start planning what you’re saving and investing that money for .

This is where you define what your goals are, and work out how much they’re going to cost. That way, you can start to adjust your spending accordingly.

What kind of goals should you be saving and investing for?

Your financial goals are any big plans for the future you’ll need a significant amount of money for. Saving and investing for goals as opposed to just because helps you stay motivated and dedicated to your savings and investing habits.

Here’s a quick goals timeline refresher:

• Short-term goals: 1-3 years. Think: weddings, education, or holidays.
• Medium-term goals: 4-10 years. Think: a property deposit or tertiary studies for kids.
• Long-term goals: 10+ years (often decades). Think: retirement.

Be realistic about how long it would take to save towards your goal, and how much you would need to set aside in your monthly budget to reach it.

Is there a guideline for how much you should be spending, saving and investing?

Whether you have a specific goal you’re saving and investing to or not, many financial fundis swear by the basic 50/30/20 budgeting rule that everyone should follow:

The 50/30/20 budgeting guideline was made famous by author and senior US senator Elizabeth Warren and helps you divide up your net income into 3 categories:

🛏️ Fixed expenses: all your basic needs (50%)

• Electricity, rates & water
• Family and education

🧳 Variable expenses: nice-to-haves (30%)

• Entertainment

💳 Savings, investing or settling debt (20%)

• Emergency fund
• Paying off credit cards or other debt

How to maintain your budget

Your budget plan shouldn’t be a once-off tool or document you shelve away until you get your next pay increase.

Treat it as a tool for monitoring your spending as your income fluctuates, expenses change or goals evolve, and for finding new ways to save and invest a little more towards your goals.

Your checklist for reviewing & planning your budget every month:

• What did you spend? Categorise your expenses as either fixed or variable, or ‘needs’ or ‘wants’ – it’ll help big time when you want to review your spending and reduce it in places.
• What can you save on? Scan your variable or ‘wants’ expenses (those nice-to-have coffees and drinks), and reduce these items in your next month’s budget to free up some cash for saving and investing towards your goals.
• What debt can you knock off? The sooner you can knock that grudge line item off your budget completely, the sooner you can put that cash towards something that excites you and that you can feel good about spending on.
• How are you tracking on your goals? Check in on your goals and take note of your progress. Celebrate small wins towards achieving them, and assess whether your goals still make sense to you.

🔖 Need further inspo? Give these a read…

How To Start a Financial Planning Bullet Journal [+ printable template]

Budgeting For a Car

Budget Streeeetch

Step-by-Step Guide to Your First Budget

What You Can Learn From the Budget Speech

Understanding Investment Risk

How to Get Out of Debt

How to Build & Improve Your Credit Score

Should I Buy a Home or Rent?

6 Savings Challenges to Actually Stick To [+ downloadable savings plans]

Personal Budget Excel Spreadsheet

If you've just entered the real world as a newly independent adult, or if you've been spending more money than you can afford, it's time to figure out a budget. To get started, you can use my free personal budget spreadsheet template in Excel or Google Sheets to track your income and expenses using a common set of budget categories. You can easily change the categories as needed.

If this is your first time trying to create a personal budget , you may want to read the article " How to Make a Budget ." It explains how to use a spreadsheet to track your expenses, and then how to turn that information into a budget.

The personal budget spreadsheet below is one of my original budget templates. It provides a simple way to create a budget, especially if you need ideas for budget categories. If you want a more complete system that helps you track , plan , and analyze your spending, try the Money Management Template .

Personal Budget Spreadsheet

Over 1.3 million downloads!

Other Versions

License : Personal Use (not for distribution or resale)

"No installation, no macros - just a simple spreadsheet" - by Jon Wittwer

Description

Like my Family Budget Planner , this personal budget spreadsheet can be used to create a yearly budget. By planning many months ahead, you can account for variable expenses and estimate how major life changes like moving, changing jobs, or purchasing a home may affect your financial future.

For the sake of documenting changes to the spreadsheet over time, here is a screenshot of the older Excel 2003 version:

More Budget Spreadsheets

• Monthly Budget - The monthly version of the above spreadsheet.
• Household Budget Worksheet (monthly) - More detailed and includes child expenses.
• Family Budget Planner - A yearly budget planner, with the same categories as the household budget spreadsheet.
• Home Budget Worksheet - This worksheet provides an alternate way of grouping the budget categories, but works very similar to the template(s) on this page.

Why Use Excel for your Personal Budget?

First reason: it's free . Microsoft Excel isn't free, but if you already own Excel, then you can create a budget without purchasing other budgeting software. If you don't own Excel, then Google Sheets and OpenOffice are free options to consider.

Second reason: flexibility . The reason I use Excel when working with my home and business budgets is that it gives me complete flexibility to keep track of the information the way I want to. For example, I like to use cell comments to explain certain budgeted items in more detail (such as the fact that in May, there is Mother's Day and a couple of birthdays to remember).

Creating a simple personal budget (even if it is only on paper) is one of the first steps to gaining control of your spending habits. Tracking your income and spending comes both before and after making a budget. For expense tracking, you could use my Income and Expense Worksheet , Checkbook Register , or the newer Money Manager . A budget is almost useless without tracking what you are spending.

I started out using Excel to do everything, but I began using Quicken after a friend showed me how easy it was to keep track of checks and credit card charges and download transactions directly from my bank. This isn't an advertisement for Quicken ... it's just a disclosure to say that I don't ONLY use Excel any more.

A spreadsheet may not be the best budgeting solution for everybody. In my opinion, the #1 problem associated with using a spreadsheet for your personal budget is the chance that you'll make errors. The flexibility comes at the price of possibly deleting or messing up an important formula, or making bad assumptions.

If you use and customize any template for your personal budget, make sure you understand how it works and always double-check the formulas. You may learn how to use Excel better in the process.

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Plan your personal budget in 7 easy steps (with templates).

Personal budgeting is a practice that most people often struggle with, but it is manageable with a bit of planning and using the right resources. It is generally defined as the art of planning and managing money on behalf of an individual or entire household. It has several vital functions, such as keeping track of your income, expenses, savings, and investments.

The first step to effective budgeting is often creating a suitable template to outline the items to include in the plan. This article will provide you with a complete guide to personal budgeting, including the steps to create it, important budgeting strategies, and the essential tips to keep in mind to ensure you make a more realistic personal budget.

Purpose of Making a Budget

A personal budget is a planning tool to help you keep track of your expenses concerning how much money is coming into your household each month. To have a well-defined budget, you must first understand its purpose. In most cases, the primary goal/purpose of creating a budget is to be able to keep track of your expenses and income.

It is essential because it can be used to figure out your monthly bills, set savings goals, separate your wants from your needs, and identify fixed expenses from those that can be adjusted to ensure you are living within your means. While creating a personal budget template, you can feel overwhelmed with all the numbers and details in the plan. Still, ultimately you will achieve more control over your finances and keep your financial situation in order.

Strategies of Budgeting

Several different strategies can be employed to create a personal budget that is highly effective. However, the overall strategy often depends on a person’s financial needs and goals, varying from one person to another.

Here are a few popular methods that you can use to ensure that your budget is practical and more realistic to follow:

Zero-based budgeting

The zero-based budgeting method usually provides the most significant amount of flexibility and control. It is not based on how much money you make each month. Instead, it uses the income you made in the previous month to pay for your current monthly expenses. The “zero” is derived from the idea that you will start with a blank slate at the beginning of the current month, which will allow for more accurate calculations for dividing your money between different expenses each month.

The 50/30/20 rule

The 50/30/20 rule is also known as the “rule of thumb.” It is a budgeting technique that is based on a person’s income. It involves breaking down your spending into three significant categories: essential spending, non-essential spending, and savings. The 50 percent pertains to your essential fixed expenses such as rent and utilities. The 30 percent pertains to your lifestyle and non-essential expenses such as entertainment. Finally, the remaining 20 percent is allocated to savings and personal expenditures.

The envelope system

In this strategy, you set up individual envelopes for each of your expenses that are fixed in nature and cannot be changed, such as rent or mortgage payments. Then, each month, you transfer the cash needed to settle these fixed bills into a designated envelope. You then use these envelopes to track your expenses to ensure you do not overspend. The envelope budgeting strategy can benefit people who often have difficulty sticking to a budget.

Pre-budgeting Groundwork

Before you embark on creating your personal budget, you should keep certain pre-considerations in mind to ensure you make a realistic and easy-to-follow budget plan.

These include the following:

Set financial goals

It is essential that you first have a clear understanding of your financial goals before starting the process of personal budgeting. Doing so will ensure that you have a better and more practical idea of what you need to do to achieve the financial goals you have set for yourself.

Make a plan

Once you have your financial goals set in place, you must allow yourself enough time to develop a realistic plan of action to achieve them. This includes creating a budget plan and deciding on the amount of money you can afford to save from your monthly income after sorting your monthly fixed and variable expenses.

Know your priorities

Knowing your priorities before creating a personal budget will also go a long way in enabling you to develop an adequate budget. Understanding your most essential needs and knowing what you want but you might survive without will help you create a budget plan that is likely to help you achieve your short and long-term financial goals.

Automate your budget

Budgeting templates are practical tools for keeping track of your finances, but only if you make an effort to stay on top. You can do this by using automatic withdrawal from your bank account or by having automatic debits scheduled at the beginning of each month to ensure that your most important bills are paid promptly.

How to Plan it?

To create an effective personal budget template, you may use a journal, notebook, or spreadsheets or download and use pre-designed online templates. However, regardless of the form and format you choose to use, consider planning your budget following the steps explained below:

1. Determine your monthly income

Creating an ideal personal budget involves determining the amount of money that comes into your household each month. You can obtain your income information from your bank statements, pay stubs, W-2 forms , investment accounts, credit card bills, 1099s , receipts from the last three months, mortgage statements, recent utility bills, or auto loan statements.

Given that your income is in the form of a regular monthly paycheck, your net income is your take-home pay after the applicable deductions, including taxes, have been deducted. If you have any other sources of income, consider adding them to your monthly net income. If you are a freelance worker with a variable monthly income, consider using income from your lowest-earning month within the past year as your baseline income when setting up the budget.

2. Make a list of fixed and variable expenses

Once you have identified your monthly average income, you should list all your expenses, including fixed and variable expenses, and allocate a specific amount of your average monthly income. Fixed expenses include monthly bills such as rent or mortgage payments, utilities, insurance, car loan payments, childcare fees, and any other regular payments that you need to pay every month. Variable expenses include food and groceries, personal care and clothing, transportation costs, entertainment, car maintenance, etc. 

3. Breakdown the expenses into categories

Next, you need to break down your fixed and variable expenses into separate categories. First, identify all the non-essential costs such as transportation, entertainment, and clothes and list these. Next, divide your budget by these categories and locate the money allocated for each type. This information will be used later when determining how much money is available for savings or if you need to begin increasing your income if it is low.

4. Make a total of all expenses

After this, you need to add up all these expenses. Finally, you will use the total to determine how much money you need to ensure that all these expenses are met each month. Depending on your income, the number of dependents, and other factors, this amount may vary from one household to another.

5. Determine your monthly spending

After categorizing your expenses into various subcategories and allocating a specific amount of money to cover each of your listed expenses, you should add up all your monthly bills and subtract the result from your total monthly income to determine your average monthly spending.

6. Evaluate the expenses

This step of effective budgeting entails evaluating the expenses you have listed in your budget plan. This is a very crucial step as it helps you determine whether you can stick with the laid-out budget or if you need to modify it. Ideally, your monthly payment should be more than your total monthly expenses. However, sometimes you may get a negative number. If this is the case, you need to change your budget, including cutting back on some of your non-essential expenses or simply finding ways to generate more income.

7. Make adjustments according to the needs

As your budget evolves, you can always make necessary adjustments to ensure that it can meet all your changing needs and demands. There is no such thing as a perfect budget plan or one-size-fits-all solution when it comes to budgeting. There is always room for modifications. To ensure it is easy for you to track and modify your budget, you must consider using a budget template that is flexible and easy to update, such that your financial situation remains balanced.

Personal Budget Templates

You can use a journal, notebook and pen, Excel spreadsheets, or downloadable templates to create a personal budget that you can use to track your income and spending. However, while the first three methods of creating a personal budget plan are effective, using a pre-designed personal budget template is relatively straightforward and allows for flexibility. Online templates also ensure that you include all the essential information. You’ll also save a considerable amount of your time and effort if you choose to use an online template compared to starting from scratch. Such professional personal budget templates are available on this site. You can download these templates for free and customize them according to your needs.

Review and Keep Track of Your Spending

Once you have created a budget that is in line with your financial goals and priorities, you should use it to monitor and keep track of your spending. Review it at least once or twice each month to ensure that it still effectively serves your purpose and is up-to-date. Additionally, you must regularly review your budget, for example, weekly, to ensure you are sticking to what is already on the plan and focusing on your financial goals and realities. In light of this, it is crucial to create a personal budget template that is tailored to meet all of your changing needs and one that you can be able to change every time the need arises.

How to Track and Record Your Progress?

You need to review your personal budget regularly to track and record your progress and ensure you consistently use it until you achieve your financial goals. However, monitoring and recording your progress may prove difficult if you use a budget planning tool that is rigid and does not allow for flexibility, such as the pen and paper method or using a journal, as you will need to create a new budget plan each time you need to make some changes.

Therefore, online budget templates, spreadsheets, and record-keeping apps are highly advocated for as they allow you much ease in keeping track of your progress. Nonetheless, creating a spreadsheet might prove difficult as it requires a lot of effort, and you may not include all the required information; thus, your final budget may not be as accurate. On the other hand, using a template or any suitable record-keeping app might prove helpful and has several benefits, including the following:

• They are easy to use: Using personal budget templates and record-keeping apps is not rocket science. However, using these templates is often more accessible as they have pre-made fields and information that allow you to fill in the gaps without going back and forth quickly.
• Increases flexibility: Online personal budget templates allow flexibility as you can constantly adjust their layout and information to suit your individual needs.
• Source of inspiration: You can use templates as a source of inspiration and ideas, especially if you have no idea where to start. This can also help you create a personalized budget plan and inspire you to save more.

Creating a personal budget is essential in helping you track your income and spending habits, enabling you to meet your short and long-term financial goals and investments. However, creating a practical and easy-to-follow budget is often easier said than done, mainly if you are new to budgeting or have no idea where to start and what to include in a budget plan. In addition, keeping track and recording your progress manually is also very difficult.

Therefore, it is always advisable to use readily available personal budget templates downloaded from the internet to increase flexibility in creating, updating, tracking, and recording your progress. You can also use the vast array of Microsoft Office spreadsheets or record-keeping apps. Regardless of the method you choose to create your budget, this article has shed light on personal budgeting. In addition, the tips which are discussed here will also help you create a budget plan that serves you well in saving money and making financial decisions.

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11 Free Personal Finance Excel Templates for Budgeting 

If you need an efficient, easy-to-use and free Excel template for personal budget or personal finance, you have come to the right place.

Managing personal budget and finances are the necessary actions that help you save money. However, managing personal finance or budget could be tricky when you have many things to take care of at work and home.

This article rounds up the best Excel templates that are also free to download. Continue reading to learn how these spreadsheets will help you save more through smart budgeting.

Free Personal Finance Excel Templates in 2024

Personal monthly budget spreadsheet.

If you’re looking for an elaborate budgeting template for personal use, you should definitely try the Personal monthly budget spreadsheet template. It lets you streamline how to utilize your monthly income throughout the month for maximum savings. The template is also truly user-friendly since you don’t need to make too many edits.

The spreadsheet comes with multiple expense headers that most households need to manage every month. For example, you can budget housing, transportation, insurance, food, pets, personal care, and so on. There are also two separate fields of income like primary and secondary sources.

The Excel template also compares projected and actual expenses with projected and actual incomes. You also get personalization opportunities since the template offers editable subcategories. You can keep a copy on your Microsoft OneDrive account for online editing and get a printed copy for offline usage.

Basic Personal Budget

The Basic personal budget spreadsheet helps you analyze complete yearly income and expense data. This personal budgeting tool is also equally useful if you need to manage the spending of any small project. When you get a clear picture of the ongoing or previous year’s annual transactions, you can find more areas of cost-cutting.

The template is free for anyone to download. It works well with desktop Excel software or Excel online. The Excel workbook comes with two dedicated Excel worksheets like Summary and Expense. You need to enter all expenses in the Expense tab and incomes in the Summary tab.

Monthly expense vs. cash status will automatically show up in the Summary worksheet. The expenses section has standard categories and subcategories that you might need to budget. Moreover, the template offers easy sorting and filtering.

Easy Monthly Budget

If you want to know how you spend and what you earn, you can try the Easy monthly budget template of Excel. It also lets you visualize the nature of spending, like the items on which you spend most. If you’re planning for short-term or long-term goals, there is no better way to manage personal finances than using this free spreadsheet template.

Its Summary worksheet shows you a comprehensive picture of monthly income, total monthly expenses, and savings. A vertical and horizontal bar chart gives a sleek dashboard-like view.

You can use the dedicated income and expenses worksheet for transaction data entry. The expenses tab comes with popular expense heads. But, you can edit them or add new rows as per your requirements.

You should also check out Notion budget templates .

Monthly College Budget

Keeping track of personal expenses is vital during college days since you can easily get carried away with distractions and spend more than you want. The Monthly college budget is a free Excel workbook that you can download for a desktop app. You may also upload it to your OneDrive account for online access print it out for manual budget tracking.

If you’re a parent of a college-going child, you can personalize this Excel sheet according to your child’s needs. Parents and children can share the sheet for a better understanding of expenses.

Expense management is effortless since you only need to enter the transaction amounts in the appropriate fields. The template has graphs, Sparklines, and slick sliders that turn personal budget into a fun activity.

Budget Calculator

Budget calculator is an easy-to-use tool to manage your expenses and income monthly in Excel desktop app, Excel online, and offline format. The template comes with editable cells to customize the expense and income headers. The template is suitable for a month’s budgeting. For the next month, simply duplicate the worksheets.

The income and expenses transactions data-entry sheet is similar to the manual notepad-based budget tracking. You can write down cash inflows and outflows in one list. When you need to add a new cash outflow header, simply enter it under the Description column and select a category under the Category column.

Simple Personal Budget

Simple personal budget Excel worksheet lets you discover an in-depth pattern of your personal finances. It is the perfect tool to track monthly expenses and incomes effortlessly from work or home. Upload a personalized version in your OneDrive account for easy access via a mobile phone, computer, or tablet.

The template is particularly appropriate if you’re looking for a one-page view of all of your expenses and incomes. There are embedded formulas in the dedicated cells to calculate yearly and monthly totals.

There are Sparklines beside each income or expense header for data visualization and analytics. You might want to try this template instantly if you’re going to save money for a future goal or control your expenditure in a better way.

Manage My Money

Manage my money is another quick personal budget-tracking spreadsheet for Excel. You need to make copies of it for every new month since it is a monthly tracker. A great attraction of this workbook is a pie chart-based dashboard that gives you a 360° view of transactions like incomes and expenses.

The template compares income with expenses and generates savings figures. Therefore, you need to enter cash inflows into the Monthly Income tab and cash outflows into the Monthly Expenses worksheet. In the end, you get a one-spot view of income, savings, and expenses. You also can visualize cash balances from the dashboard.

Household Monthly Budget

Do you want to manage the monthly family budget the right way? You can download the Household monthly budget template for free and get started instantly. Its overview tab gives a clear view of balance, income, and expenses. You’ll also see a category-wise breakdown of expenses just below the summary dashboard.

The Excel template comes with more than 50 expense headers. Thus, there is a lesser chance that you need to enter any manual cash outflow headers since the existing list covers all. Simply adjust the Projected and Actual Cost headers in the Monthly Expenses worksheet to start tracking expenses.

Wedding Budget Template

Wedding planning is a major project for anyone, and thus there should be a streamlined wedding budget planner as well. You can try the Wedding budget template for Excel to visualize all the expenses in real-time. Also, you can modify the fonts and table colors to match the expenses planner with your wedding theme.

It is a budgeting tool that shows you all the cost headers in a single window. Simply scroll down to find out all expenses. The tables also give you a visual cue whether you’re going above or below your wedding budget.

Vacation Budget Planner

Ensure you’re traveling with adequate cash and not going beyond your budget by using this simple Vacation budget planner tool for Excel. It is essentially a spreadsheet with common travel expenses headers like airfare, lodging, transportation, and many more.

There are two tables in this Excel worksheet. The first one visualizes the broad categories like transportation and lodging. The second table deals with subcategories that come within the main expense headers. You can also add unique cash outflow headers.

Monthly Food Budget

Sometimes you need to focus on a specific expense header like the monthly budget for food, entertainment, or shopping. It helps you with a granular view of particular spending that often goes beyond the budget. Use Monthly food budget for worry-free budgeting.

At the beginning of the month, enter a budget. Then, start entering the food purchases into the expenses tab to track your expenditure on groceries. You may also rename the text box beneath the image header to change the food budget to something else.

Next, let’s learn a little bit basics of managing a personal budget in a spreadsheet.

What Is an Excel Template for Personal Budget?

An Excel template for personal budget is essentially a spreadsheet file. It contains all the columns, rows, headers, formulas, and styles, so you don’t need to invest time in formatting. All you need to do is upload the file to your OneDrive and track your personal finances.

A template also allows you to customize the data headers, add or delete rows/columns, and format the worksheet style. You can get a template based on how granular data you want, like bi-weekly, monthly, or yearly budget.

All the templates mentioned below will let you download an Excel file to the computer or open the template in the browser for online tracking.

Benefits of Free Excel Templates for Personal Finance and Budget

The advantages of tracking your personal budget on an Excel sheet are as follows:

Data Privacy: Excel templates are reliable and safe since you don’t need to enter your personal finances on a third-party website or app. You retain your data to yourself, so no worrying about data theft.

Anytime Access : You can keep a copy of the file on your desktop computer and upload the same to OneDrive. Excel will automatically update the online file whenever you make any changes on your desktop computer. Moreover, you can access the workbook on your Android or iOS devices since you can get an Excel mobile app for free.

Let’s now look at the free templates for personal budgeting in Excel:

The above-mentioned free Excel templates should cover all of your personal budgeting needs. Depending on the scenario, like a family budget, food budget, child’s college expenses, you can pick any free Excel template and start saving money.

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How to Create a Personal Budget in Excel (With Easy Steps)

Here is an overview of a personal budget.

Introduction to Personal Budget

A personal budget is a financial plan that outlines an individual’s income and expenses over a specific period, usually a month or a year. It typically includes all sources of income, such as wages, bonuses, and investment income, as well as all expenses, such as rent or mortgage payments, utilities, food, transportation, entertainment, and savings. By tracking these expenses, individuals can identify areas where they can reduce costs or increase savings.

Creating and sticking to a personal budget is an effective way to manage money, pay off debt, and achieve financial goals. It can also help individuals prepare for unexpected expenses and save for future purchases or investments.

How to Create a Personal Budget in Excel

This tutorial will demonstrate how to establish a budget that can be readily modified to match your needs, regardless of how straightforward or intricate.

Step 1 – Set Time Period of Budget

The time period of a personal budget can vary based on an individual’s needs and preferences, ranging from a monthly budget to a yearly budget or even longer.

In our example, we will use a monthly budget for the month of January 2023 .

Step 2 – Categorize Income Sources

• List your income sources in column B .

Step 3 – Classify Expenses

There are some broad expense categories like Necessary Expenses (column C ), Occasional Expenses (column D ), Regular Repayments (column E ), etc. Under each category there are sub-categories.

Needless to say, the income and expense categories listed above are just an example. Adjust as necessary to suit your own requirements..

Step 4 – Record Actual Incomes

At the beginning of a time period, set a projected income (column C ) for each of your income sources. Then record your actual income (column D ) against these projected incomes.

Calculating the subtotal requires a simple formula using the SUM function .

For example, to calculate the sum of the Projected Income types:

• In cell C12 enter the following formula and press ENTER :

The subtotal for Actual Income types is calculated the same way:

• Enter the formula below in cell D12 :

Step 5 – Compare Actual & Projected Incomes

To compare the actual incomes with the projected ones, we subtract the projected from the actual incomes .

In cell E7 , enter the below formula, then press Enter and use the Fill Handle tool to copy the formula down to cell  E12 :

Step 6 – Track Actual Expenses

Now record your expenses. This involves:

• Tracking expenses of each sub-category.
• Calculating subtotals of each expense category.

The tasks are similar to the previous steps. It should look like this after completion:

Note that only Necessary and Occasional expenses are included in this example. There are additional categories in the Excel file attached to this article below.

Step 7 – Make Comparison Between Projected Expenses & Actual Expenses

The process is similar to how we compared projected and actual expenses above. The output should look as follows:

Step 8 – Calculate Income & Expense for Specified Time Period

Now we can summarize the budget.

Projected Income vs Expenses

Projected Income can be derived from the “ Personal Budget ” sheet.

• The formula in C7 will be:
• Press ENTER .

For projected expenses, add the subtotals of all the expenses.

• The formula in D7 will be:
• Press ENTER  to return the result.

Actual Income vs Expenses

In a similar fashion, calculate the actual income and the actual expenses.

• The formula used in cell C8 will be:
• The formula in cell D8 will be:

Step 9 – Highlight Key Information

We’ll highlight the following:

• The difference between the actual income and projected income.
• The difference between the actual expenses and projected expenses.
• The remaining balances.

The difference can be calculated by subtracting the actual values from the projected ones. To get the difference between the actual income and projected income:

• In cell C9 enter the following formula and press ENTER :

• Similarly, derive the difference between the actual and projected expenses.

The Projected Balance is the subtraction of the Projected Expenses from the Projected Income .

• The formula used in cell E7 will be:

• Similarly, the Actual Balance in cell E8 will be:
• The Difference in Balance in cell E9 will be:

• The required information is highlighted.

Read More: How to Make a Household Budget in Excel

Analyze Projected and Actual Income from Income Sources

You can analyze your projected and actual income from different income sources. For example, here we earned $50 less than the projected income in the month of January 2023.

Additional Feature – Track Your Savings in Excel Personal Budget

You can use a budget to record your savings too. A sheet has been provided in the Excel file below for this purpose.

How to Use Excel Built-in Templates to Create a Personal Budget

Excel includes many templates for budgeting. To use one:

• Click on the File menu item.

• Select New from the window.

• Type “ budget ” in the search box and press ENTER .
• Select a template of your choice.

• Select “ Create ” from the next window.

Excel will create a new budget for you.

Frequently Asked Questions

1. How often should I review my personal budget?

It’s a good idea to review your personal budget at least once a month to ensure you’re staying on track. If you have significant changes in your income or expenses, it may be necessary to review your budget more frequently.

2. What are some common mistakes people make when creating a personal budget?

Common mistakes include underestimating expenses, failing to track spending, and not accounting for irregular expenses like car repairs or medical bills.

Download Practice Workbook

Related Articles

• How to Make a Budget in Excel for College Students
• How to Make a Wedding Budget in Excel
• How to Make a Family Budget in Excel
• How to Create a Department Budget in Excel

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Learn Personal Finance Personal Budget: Benefits, Importance and 6 Easy Steps

Personal Budget: Benefits, Importance and 6 Easy Steps

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We all have different types of financial goals that we want to achieve in future, it can be building a comfortable retirement, purchasing a dream home, or wealth creation . But to achieve these goals and live a stress-free life in the future, it is important to manage your money effectively. A personal finance budget is one of the best financial tools to help you in this process. It’s like a roadmap for your finances that helps you to allocate your money, track your income and expenses, and save for the future.

In this blog, we will tell how you can make your personal budget in six easy steps. So, let’s go deeper.

What is a Personal Budget?

A personal budget is a financial plan prepared to track the income and expenses for a specific period, usually weekly or monthly. It often includes a portion dedicated to saving money or investing for future goals, such as emergencies, education, or retirement. 

The primary purpose of creating a personal budget is to manage money effectively, allocate resources wisely, and achieve financial goals. It is prepared on the basis of multiple factors such as income, expenses, debts, future goals, etc. Considering all these factors, a budget allows you to manage your money more effectively. 

Why Is Budgeting Important?

Likewise, we say cut your dress according to your clothes, which means limit your expenses as per your earnings. Budgeting follows this idea by allowing you to manage your expenses according to your income, which makes it an important part of your financial planning. Here are some other reasons make budgeting an important tool:

• Financial Control: Budgeting allows you to monitor and control your expenses, ensuring that you don’t spend more than you earn.
• Goal Achievement: With budgeting, you can allocate your money for some specific financial goals, such as saving for a vacation, buying a home, or getting out of debt.
• Emergency Preparedness: It also allows you to set aside a fixed amount of money for unexpected situations in the future,  ensuring you’re prepared for emergencies.
• Debt Management: It helps you track and manage your current outstanding debt.
• Peace of Mind: Budgeting allows you to manage your money. Knowing where your money is going and having a plan for the future reduces financial stress and provides peace of mind.

How to Make Personal Budget in 6 Easy Steps?

A personal finance budget is a financial tool that helps you control your expenses and save for the future. But to make a personal budget can be daunting, as it involves multiple processes and decisions to be taken. So, how can you make a personal budget for yourself?

By following the below steps, you can build a perfect personal budget and make informed decisions about your money.

1) Find the objective

It is impossible to predict the future, but a few basic questions need to be answered early on in life. For example, when do you want to retire? What are your plans after retirement? Do you want to buy a house? Whether you want/have children, and if yes, then what are your plans for them? List your priorities and write them down. The process of writing them down will help you simplify things, and this is known as financial planning . Most people fail to manage their personal finance only because they do not have a clear agenda set for themselves. This practice will help you understand how much you need to save for each purpose and for how long. More importantly, priorities change from time to time, hence, change your personal financial plans accordingly.

2) Identify your expenses

Track your family expenses for two to three months to find out how much is spent on what task every month. Identify the absolute essentiantial and allot money accordingly. First make sure to pay for the fixed expenditures like home loan/ rent, car loan, utility bills etc. and then prepare a budget for the variable expenses like grocery shopping, eating out, movie nights and others. Make sure that you do not spend more than you have allotted in each of the buckets. Also, if you feel that you are spending more than you can afford, then make sure to check on the expenses especially the variable factors.

3) Separate need from want

Separating your needs from your wants is very crucial for financial freedom . There are many things that we want, but it has to match with what we can afford. It might seem easy that loans and credit cards have increased our power to buy more, but there is always a catch. For example, your car is a depreciating asset, and hence, it is always suggested that you buy in the range for which you can pay back the loan within five years. Now, with easy bank loans, it may seem that you can buy a car worth Rs 20 lakh, whereas you can afford one that costs Rs 7 lakh, i.e. you can comfortably repay this amount within five years. Probably, for your second car, you might plan to buy the Rs 20 lakh model, considering your salary and net worth will increase in the next five years.

Refrain from using credit cards as much as possible. It can completely destroy the health of your personal finances.

4) Plan ahead

There are yearly expenses from tax/insurance payment to holidays that can be planned ahead. If you keep aside a small amount every month targeted towards a particular expense, then at the end of the year you will be financially prepared for it. Often people end up taking personal loans for such purposes and keep on paying for it, including the interest rate, for the rest of the year. Simply, if we can reverse the cycle and plan ahead, then we can save ourselves from some unnecessary stress and losing money.

One of the strategies that you can use while making plans for the future is the 50-30-20 rule. This rule helps you create a personal budget by breaking your finances into three parts.

• 50% for Needs: You can allocate 50% of your income to cover mandatory expenses, such as house rent, phone bills, electricity, groceries, etc.
• 30% for Desires: You can allocate 30% of your income to cover leisure activities such as vacation, shopping, entertainment, etc.
• 20% for Investments: You should allocate 20% of your income for savings and investments. Here, you can invest in mutual funds, fixed deposits, PPF, NPS, etc., depending on your goals.

5) Emergency corpus

Even before you start saving and investing, it is necessary to build an emergency corpus. This is a fund that is set aside for emergencies and the rule is you should never touch it unless there is an emergency. Now, how do you define an emergency? Paying your credit card bill is definitely not one of them. This money can provide financial relief during job loss, illness and accidents. The size of the fund should be three to six months of monthly expenses that is necessary to survive. Building an emergency corpus is a crucial aspect of your personal financial planning and money management.

6) Make sure to save

There is a simple formula to know how much you can afford to spend.

Income – Saving = Expenses

Fashion your expenses around this formula. Now, how do you know how much to save? First, set aside 10 percent of your income as your retirement corpus and never use it for any other purpose, not even for your children’s education or marriage. Next set your future goals, short-term, mid-term and long-term, plans basis your priorities. Apart from retirement plan, long-term goals include children’s education plan and marriage plan etc, mid-term goals include down payment for a house or car, and short-term plans include travel, buying gadget and appliances etc.. Set aside some money as per your estimate in each of the buckets, and whatever is left, you should plan your personal budget around it.

Believe it or not, a little financial discipline can make a big difference to the health of your personal finance. Start small but start early to see your money grow exponentially – this is the best practice among all the money management rules.

What are Common Budgeting Mistakes to Avoid?

When we prepare a budget for ourselves, there are some mistakes which can be made by any of us. Here are some of the common budgeting mistakes that should be avoided for effective financial planning. 

• Not Tracking Expenses: It is important to track all the expenses that you will be going to incur in the future, be they vacation expenses, appliance purchases, education, etc. Failing to track these expenses can lead to overspending and deviation from the original budget. 
• Neglecting Emergency Funds: Overlooking the importance of an emergency fund can leave you vulnerable to future unexpected expenses.
• Setting Unrealistic Goals: While preparing a budget, setting achievable targets that match your income and expenses is important. It should not be unrealistic. 
• Regular Monitoring: Budgeting is not a one-time process; it should be regularly monitored. Failing to adjust your budget can lead to deviation in your overall financial planning. 

What are the Benefits of Having a Personal Budget?

A personal budget is a valuable tool with multiple benefits that smoothen your financial journey. Here are some of the benefits of having a personal budget:  

• Financial Awareness: Preparing a budget can help you to gain a clear understanding of your financial situation.
• Saving for Goals: With the budget, you can save some portion of your income for investments to save for short-term and long-term goals.
• Debt Reduction: The budget allows you to track all the expenses that you will incur in the future. In this way, you can find the unnecessary expenses and cut them down or reduce them. 
• Reduced Financial Stress: Financial uncertainty can lead to stress and anxiety. With a personal budget, you get complete peace of mind as you know where your money is going and can be prepared for any future expenses.
• Improved Decision-Making: Budgeting also helps you in making your financial decisions easier. Before making any purchases or indulging in any financial commitments, you can refer to your budget and may decide whether you should proceed or not. 

In conclusion, personal finance budgeting is an effective financial tool that can provide financial stability and help you achieve your dreams. But remember, budgeting is not a one-time task; it requires regular monitoring, and you should be disciplined and consistent towards your budget. Sticking to your budget enables you to manage your finances effectively and have a stress-free life. So what are you waiting for, create your personal finance budget, and embark on your journey toward financial freedom.

FAQs for Personal Budget

There is no right answer to it as it depends on the individual’s income and expenses, but in every case, your expenses should not exceed your income. Here, you can use the 50/30/20 rule to manage your spending. As per this rule, you can allocate 50% of your income to necessities such as house rent, utilities, electricity, travel, etc. And another 30% on discretionary expenses such as vacation, movies, shopping, etc. The remaining 20% should be saved and invested.

The different types of financial budgets are 50/30/20 budget, Envelope budget, Pay-yourself-first budget, and Zero-based budget.

A personal budget is like a roadmap to your financial journey that helps you track and manage your income and expenses. It is important to prepare a personal budget as it allows you to become aware of your financial condition, reduce unnecessary expenses, reduce financial stress, and so on.

For any unexpected expenses in future, you can maintain an emergency fund and start saving for that. You can use this fund to remain financially stable if an unexpected expense arises.

You can save money by allocating some of your income to investments, such as starting SIP in mutual funds. Also, you can cut down on your unnecessary expenses.

You can use both cash or cards for budgeting; it hardly matters. But here, the key is to stick to your personal budget and make your expenses as per your budget only.

Fixed expenses expenses are those expenses that remain constant, like house rent, EMI, insurance premium, etc. In contrast, variable expenses are fluctuating expenses, such as groceries, entertainment, electricity, etc.

You should review your personal budget monthly and make changes if required. Also, if there is a change in your income and expenses, then you should update your budget accordingly.

You can stick to your personal budget by setting realistic goals, tracking your spending, and making adjustments if required. And you should stay disciplined with your budget.

Identify the key issues by reviewing all your expenses and make adjustments if required. Also, you can seek professional advice if your issue is unresolved.

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Personal Budget

The purpose of this assignment:.

• Create a spreadsheet
• Add, delete cell content
• Copy, move cell content
• Insert, delete cells, columns, rows
• Create simple formulas
• Format cell content

Preparation: (Review these terms)

New terms: (terms are bolded in the steps).

• Merge and Center a Title (#3)
• Center Column headings (#6)
• Widen column (#8)
• Insert New Row (#15)
• Insert Currency Symbols (#19)
• Create simple formula without using AutoSum (#24)
• Seeing a string of ####### signs in a column after a formula applied
• Wrap Text (#26)

A budget is a plan for your money. Sometimes, as individuals, sometimes we make purchases without remembering other obligations we already had. It is good to have a budget and to work within that budget. This exercise will give you the basics to set up your own budget. (THIS ASSIGNMENT IS WORTH 5 POINTS. THE RUBRIC OF THIS ASSIGNMENT IS ON PAGE 4.)

Personal Budget Assignment:

• Starting with a blank spreadsheet (see Review of Spreadsheet Features in this assignment), start in cell A1 type the words” Personal Budget” in ALL CAPS.
• Select PERSONAL BUDGET and change the font to Arial Black 14 pt
• Merge and Center a Title. Select cells A1 to G1. From the HOME tab, find the Alignment Group. Click on Merge &Center. The title, “Personal Budget”, is now centered on the table.
• In cell C3 type the abbreviation of January (Jan)
• In cell D3 type Feb; in cell E3 type Mar; in cell F3 Apr; and in cell G3 type May.
• Center Column Headings. Select C3 to G3. From the HOME tab, Paragraph group, click on the center alignment choice.
• In cell A4 type the word EXPENSES in all capital letters. Select EXPENSES. Bold, underline and change the font to Calibri, 14 pt.
• Widen column. Place your cursor between the letters A and B indicating the columns just below the ribbon. Double click your mouse. This will widen the column to accommodate the information in that cell.
• In B5, listing five expenses you might have. Place each expense on a separate row. Expense examples might be rent, car insurance, phone, date night, gas, bus ticket, food, credit card, loan repayment, etc. Once all your expenses are listed, widen the column between B and C to accommodate the length of the words used for expenses.
• After your last expense, skip a row and in cell A11 type the word INCOME in all capital letters. Bold, underline and change the font to Calibri, 14 pt.
• Starting in column B12, list three income sources. For example, job, scholarship, parents, tips, loan, etc.
• Next return to Cell C5 and start enter expense amounts for each month. Try not to use the same amount for each month. Be creative (it doesn’t have to be accurate.)
• Continue to enter different amounts for the other four expenses across the five months without duplicating numbers if you can.
• Next move to the INCOME section. Enter some amount for each income source across the five months. Try to make your amounts for the income section a bit higher than your expense amounts.
• Insert a new row. Select the word “INCOME. Right-click the mouse and choose INSERT from the shortcut menu. This will insert one blank line above the word INCOME. INCOME should now be in cell A12.
• In Cell A11, type the words Total Expenses capitalizing the first letter of each word. Bold these words.
• AutoSum key. Click in Cell C11, add up the totals for January using the AutoSum key. Press the ENTER key or click the checkmark on the formula bar to display the Total Expenses for Jan.
• Using AutoFill. Use the AutoFill square in the cell to drag the formula in Column C to columns D-G. If done properly, D11 formula should be =SUM(D5:D9)
•  Inserting currency symbols. You will be adding dollar signs and decimals points to C11 to G11 only. Select C11-G11. Click on the HOME tab and find the group labeled NUMBER.(the square with an arrow to the right of the word NUMBER). Look at the list of choices in the drop down dialog box and choose currency with 2 decimals.]
• In Cell A16, type the words Total Income capitalizing the first letter of each word. Bold these words.
• Using the same procedure used to AutoSum the total expenses for each month, total your income for the month. (See Step 17-18 for additional help.)
• Select C18 to G18 and change the amounts to currency. (See Step 19).
• Click in Cell A18 and type in the word BALANCE in all capital letters. Bold it and change the font to 14 pt.
• In cell C21 Start with an equals sign (=) followed by the word SUM all in capital letters
• Without spacing, after the word SUM, place a forward parenthesis; example (.
• We want to subtract the Total Income in January with the Total Expenses in January. NEVER USE FIGURES. ONLY USE CELL REFERENCES.
• Following the forward parenthesis after the word SUM, click in the cell that contains the Total Income for January. The cell reference C18 should appear in the formula.
• Next input a minus sign (-) without spacing. Click in the cell for the Total Expenses for January. The cell reference C10 should appear.
• Insert a closed parenthesis. You should see the entire formula in the formula bar as well as in cell C21. (Note: If the resulting amount is in red or has a minus sign in front of it, it just means that your expenses are larger than your income. If this was really your personal budget, you would have to figure out how to make that a positive number. You might have to reduce your expenses or find other income sources.)
• ENTER. An amount should appear that is the difference between your income and your expenses. 25.
• Using the AutoFill (see step 18), drag the formula from January to the other four months.
• Note: Seeing a string of ####### signs in a column after a formula applied. This is the result of a number being larger than the space permitted in the column. Double click between the two columns to widen the space and the amount should appear
• Select the BALANCE row and apply dollar signs and decimals to the figures.
• Wrap Text. Type your name in cell A21. Use Wrap Text to keep your name in the cell without having to widen the column. The Wrap Text button is found on the HOME tab, Paragraph group.
• Save your work and submit it through Blackboard where indicated.
• If you are not using Blackboard, print your personal budget. Your instructor may want to see the formulas you used. If that is the case, your instructor will tell you how to print the formulas used.

Check the rubric below to be sure you have completed all the tasks

• Personal Budget. Authored by : Fran Wells. License : CC BY: Attribution

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Chapter 12 Financial Aid and Funding Options

12.2 Personal Budget

There are many different ways of paying for educational expenses. When creating your own financial plan for school, you may wish to consider:

• Working to save for tuition and expenses before attending.
• Working during summer months to pay for your school semester.
• Working part-time and attending school part-time.
• Cutting down on living expenses by living with family or in student housing.
• Applying for grants, bursaries, or scholarships.
• Requesting support from family.
• Applying for student loans.

Exercise: Financial Aid

Talk to someone from the financial aid office at your school of choice. The people in this office may suggest other options for funding that you are not aware of.

Jot down some notes after talking with the financial aid people. You may need these notes for your Budget assignment (coming soon!).

Making a Budget

A budget is a document that tracks the money you have coming in including sources of income, and the money you have going out to pay for your expenses. For students, a budget helps them plan for future school expenses, keeping in mind all sources of income, including student loans, grants and earnings from part-time work or full-time summer jobs.

When returning to school, most people have to really think about their needs versus their wants :

You may have to let go of some wants when you return to school. Can you think of some wants you could eliminate from your budget while you are a student? How about making coffee instead of buying coffee? Buying less clothing? Going out to movies less often and staying home to watch one instead? You may find it is easier to eliminate some expenses that are wants rather than needs.

Exercise: Saving Money

List as many ways as you can that you can cut back on expenses in your own personal life. Make sure they are practical and doable. For example, it may not be practical to save money on a bus pass if the alternative is walking to school one and a half hours each way. This will help your fitness level but may seriously cut into your study time, so it is likely not worth the savings. Likely you will think of many practical areas you can save money though.

Also remember that budgets get adjusted regularly, so you’ll have to review your budget often. Add income that may come in, such as bursaries or income tax returns, to keep your budget accurate.

Exercise: Prepare a Simple Budget

Using your word processor program, prepare a simple budget showing how you would pay for 1 year  of your program at a post-secondary institution. The easiest way to start is to break down your monthly expenses and add the costs associated with school. You will have to estimate expenses for many items (e.g. food, hydro)

Be sure to include your costs for:

• Accommodation – rent, mortgage, or student residence (example: $800 per month times 12 months)
• Hydro (example: $85 per month times 12 months)
• Personal care items
• Childcare (if necessary)
• Transportation (remember: your fees at many post-secondary institutions in BC include a bus pass)
• Tuition and student fees
• Phone and internet services
• Any other special expenses you can think of

Also include a detailed list of where your funding might come from. Be sure to include:

• Money you have saved
• Education savings plans (e.g. RESP’s)
• Income from a part-time job
• Tax returns and credits
• Gifts/loans from family and friends
• Student loans (use the information you gathered from talking with financial aid offices at your institution)
• Scholarships, bursaries, etc. (use the information you gathered from talking with financial aid offices at your institution)

Personal Budgeting

Personal budgeting sounds like a boring and constricting thing to do. In reality, it is enlightening and empowering. The truth is that most people don’t know where their money goes every month. They seem surprised when it runs out. But it should never be a surprise. The amount of money coming in needs to be greater than the amount of money going out. Otherwise, you’ll end up running out, or going into debt. It’s particularly frustrating when you can’t afford to do something which was really important to you, because you inadvertently spent money on something that really wasn’t that important to you.

Creating a personal budget means being intentional and proactive about where you spend your money. Budgeting is creating a plan to make sure it goes where you want it to go – no surprises. Tracking your spending will help you be aware of the realities of what you spend your money on. This is particularly important for a couple. Money is the biggest thing that causes conflict in a marital relationship. Often couples tend to think it’s the other person who is out of control on their spending. It can be eye-opening to track spending and see where you yourself are spending more than you thought. A personal budget is a finance plan which allocates future income towards expenses, savings and debt repayment. Personal budgeting requires both creating a doable plan and following it.

Different Ways to Budget

There are several ways to create a personal budget, and you need to choose a way that works for you. Some divide up their cash into marked envelopes designated for different categories (rent, food, cell phone, car, entertainment, etc.) and some track it digitally using a spreadsheet. What most people find is that if they do it for a good length of time (such as a year), they change their spending habits enough that they don’t have to track so carefully anymore.

Of course, as income changes, habits change, and money issues creep in again. It’s a funny thing. You’d think that when you start making more money, it would be much easier to balance your budget every month, but in reality, as wages increase so do expectations and expenses. It’s a good idea to redo your personal budget as required.

Once you get started with a personal budget, first building it, and then sticking to it, you will realize it’s easier than you think.

Exercise: Compare Budget Templates

Explore a couple of different ways to create a budget. Here are some examples:

• TD Excel Worksheet: Personal Budget Spreadsheet – TD Canada Trust [Excel]
• Spreadsheet123  Online Personal Budget . You will want to ignore the ads (don’t click on them) and you can ignore the survey it asks you to do (click on “skip survey”).

For both of these examples: Make sure to click on enable editing once you have downloaded the file. Then you will be able to insert your own figures into the chart. The nice thing about these online tools is that they do all the math for you.

You may explore a different budget template that you are familiar with or that someone recommended to you. Some people prefer to use good ol’ pencil and paper and make their own charts. Think about which templates or models will work well for you. You will use one in the assignment below.

Once you work out your budget, you will be able to see how much  discretionary money (the money left over after all the necessary payments come out) you should have at the end of the month. Then you can decide how much of it will be for savings, for charity, for a special purchase, or for a special holiday.

However you decide to do it, your budget should reflect your spending. Notice that most pre-made charts have a place for other . It’s important to identify the other items that are unique to you. Think of your habits (good and bad). If you buy a case of beer every week, or a pack of cigarettes every day, or go skiing every Saturday, make sure you put these in your budget as well. You may need to adjust the amount once you evaluate whether or not you can afford these.

Assignment: Develop a Detailed Monthly Budget

Use the simple budget you developed above. You should be able to use the information you gathered there to complete this more detailed budget exercise. For this exercise:

• Reflecting on the “To do” activity above, think about the different ways to keep track of a budget.
• Choose one of the above methods or find one that you like better.  Alternatively, you can create your own budget sheet.
• Make a personal monthly budget. Fill it in and take inventory: calculate how much you spend and how much you make. Record any debts, and any savings plans. If you are in debt, include debt repayment in your budget with a timeline when your debt will be paid off. If you have any special things you are saving for, identify these along with the cost, the monthly savings, and when you will be able to afford to purchase the item or when your savings goal will be met for items such as attending post-secondary.
• Now make a personal plan identifying strategies you will use to be able to stick to your budget. Choose ones that you think will work for you. What changes will you make in your spending practices?

Your assignment will consist of the monthly budget sheet along with a short paragraph discussing changes required. If you are using an online tool to create your budget sheet, print it to have a hard copy and save it one your own computer. If you are using pen and paper, make copies of your budget to use as working copies each month.

Financial Planning

Making a budget and following it is the first step. Budgeting will help you get control of your spending and be more aware of where your money is going. As well as using a budget to manage your current finances and short-term goals, it is important to plan for future needs.

For example: do you plan to have a family and purchase a home? Do you plan to attend post-secondary full time? Do you want to save for your children’s post-secondary education? Will you need a new car in a few years, or have to do a major renovation to your home? If you don’t plan ahead, these things likely won’t happen. Financial planning for the future often just involves identifying those things that are important to you, and then building it into the plan. Putting a little bit every month into a savings plan can add up quickly, and it will be there for the things that matter to you. Once you determine a reasonable amount to set aside each month, it’s good to make sure it’s done automatically. You can set up your finances so that payments automatically go into:

• Savings accounts at your bank.
• Investments such as GICs, mutual funds, stocks and bonds.
• Education savings such as RESPs.
• Retirement savings such as RRSPs.

Depending on your circumstances, this may seem impossible. Sometimes there just isn’t enough at the end of the month to have anything extra. After analyzing your income and expenses, it may cause you to realize more changes need to be made. Do you need to get a different job that pays more? Do you need to get an additional part-time job to supplement your income? Can you find ways to do things more inexpensively (spend less, find cost savings, change habits?) Do you need to sell something that is draining your finances? You will need to come up with a plan that will at least allow you to balance your budget each month. Whether your budget is to prepare for post-secondary school (save money so that you can go in the future) or to attend now (budget so that you can stretch your money throughout the school year), using these principles will help you achieve your goals.

Text Attributions

This chapter is a remix of the following resources:

• “Module 1, Unit 2: The Decision Making Process – Section 9 Financial Planning for School” in the Education and Career Planning Open Course by Allison Schubert. Adapted by Mary Shier. CC BY .
• “Module 4 Living Skills Section 2 Money Management” in the Education and Career Planning Open Course by Mary Shier. CC BY .

Media Attributions

• Calculator © brandnewday, pixabay is licensed under a Public Domain license

Student Success Copyright © 2020 by Mary Shier is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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