Budget
What I want to do today is to show you what I do. My budget is pretty simple and although most people will probably stick to their own way of budgeting, it may help some of you, especially those who are debating over what sort of budget is best for them.
My Budget
I keep my budget in an Excel spreadsheet as I am familiar with this program and I love using it for this sort of thing. I could just as easily write all this down on a piece of paper.
Keeping It Simple
The budget consists of 2 tables. The first one is a simple list of five broadly categorized outgoings: Debt, Mortgage, Bills, Food and Left Over (the diagram below shows my budget with just the percentages showing).
As this is my “Debt-Busting” budget (I am planning on being debt free by the end of the year – mortgage aside, of course) I am funnelling just over a quarter of my income into paying off my personal debt. My mortgage takes up a third of my wage (and this includes a little extra over and above what the bank asks for as a minimum), bills about one-fifth, and food is next on almost 8%, and whatever is left over after all these sits at just over 12%.
Fun Money
The Left Over amount is money I have left to play with once everything else is taken out. It is my fun money, as well as the money I use if I need to buy clothes, hair gel or any other person sundry items. Some of you might be thinking that this isn’t very much at all, but to be honest I don’t spend all that much money at the moment (as I am focusing on paying down my debt), and I don’t tend to buy clothes very often, and if I do I usually buy them relatively cheaply.
Bills
The other table that I mentioned earlier (see below) is a more detailed view of my bills. This gives me a more detailed breakdown of what bills I have to pay and how much they are. This allows me to break down each bill into fortnightly payments (I get paid fortnightly) so I know exactly how much to put aside each pay for each of the bills, even though most are paid on a monthly or greater period.
The percentage rates shown is the percentage of the bills total above, so while my total bills payment each fortnight is 20% of my entire pay, Rates and Water makes up 16.3% of my bills total (only 3.3% of my total wage).
I believe it is of the utmost importance to put aside enough money to cover all your bills each pay, as this will allow you to have enough money to cover any bills that come in straight away.
Bank Accounts
To organise my categories I have a few different bank accounts where each different category gets transferred into. My debt and mortgage payments are obviously paid directly into their respective accounts, but I have a separate savings account for Bills and for Food, so I know what money is for which. It’s just a simple way I use to know what money is for what.
Review
I review my budget at least every fortnight to make sure that I have everything covered. I usually have to tweak the amounts every so often as either my bills or mortgage payments change, but that’s all I have to do.
This budget has changed over the years, and I started with many more categories but realised that I was making it over-complicated and so cut back the categories to their bare minimum – this makes it much easier to deal with.
Do get trapped into thinking that your budget need to be static – if yours isn’t working for you the way it is feel free to change it so that it does.
Remember, there is no right and wrong budget.
I would love to know your thoughts and how you work your budget.
Author Info
This article was written by Russ – the founder of MonoMoney.com and total geek. Feel free to contact him via this website and let him know how well he is doing. Or just leave a comment below.
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