## Budgeting | Part 1 | “Start A Budget”

Often people wonder how I am able to change my wardrobe and furniture as much as I do without a huge salary. For me its quite simple:

*the thrift lifestyle!*but a more accurate response is a little more complicated: I budget. My parents developed a way to track their budget more wisely after years of just having a loose idea in their minds of what goes where. They began watching “Til Debt Do Us Part” where they started learning even more tips and tricks.

Personally having never watched the show (hurray for no tv!) I find this basic excel sheet budget the absolute best tool one can have for their personal savings and spending. I have taken some time to write out a complete step by step tutorial on how to create and begin your budget over two very extensive blog posts. If you’re ready to start saving, click the link to begin the tutorial!

I begin with creating a google or gmail account, this way I can easily access my spreadsheet from anywhere at any time. Once you have create an account, visit Google Spreadsheets to begin your first spreadsheet. In the lower right hand corner you will see a green circle with a plus (+) sign, click this to create your budgeting spreadsheet.

This is a very long post so I have broken it up into sections which you can jump to at any time to make it easier.

Step 1 – Setting up the Framework

Step 2 – Setting up the Formulas

Step 3 – Input Pay & Bill Schedule Information

Step 4 – Start-up Dollar Amounts

Step 5 – It’s Best to Over-Budget

Step 6 – Begin Using Your Budget

Step 7 – Using Your Weekly Budget

Step 8 – After Your First Month

##### Step 1 – Setting up the Framework

Begin with giving your spreadsheet a name by double clicking on the title at the top. I called mine “My Budget”. Next comes the columns.

In the A1 box, simply type “current” as we will be filling this with information later. I like to keep my spreadsheet clean and spacious, so I would skip a line so it is easier to read later on which brings us to A3.

A3 type “Date” this will be your billing and payday date column. I get paid weekly which I find to be the easiest way to do a budget however it can be done based on any pay period.

Write down all of your regular monthly expenses (rent, utlities, groceries, car payment…) you will be making a column for each. Beginning with column B3, type in each of your expenses.

As a matter of personal preference and aesthetic, I like to colour code and style my spreadsheet so its very easy to read. Begin by clicking on B3, click (and hold) while moving your cursor over all of the expenses to the end, then let go. This should select all of the expense columns at once. If it doesn’t work, you can select them all one by one. In the toolbar above you will see a little paint can pouring symbol (Fill Color) click this button, a colour swatch will pop up and you can choose a colour. I recommend not using red.

While your columns are still selected, click on the icon in the toolbar that is an A with an underline (Text Color). Change colour if necessary. Next I would press Ctrl and the B key at the same time on my keyboard to make the text bold. Skip a column so there is a separation, and type in one box “Total” and beside it “Bank Account”. Change these two boxes to be another colour as per above. The *Total* column will be an ongoing total of how much money was added or removed each week, the *Bank Account* column will be an ongoing total of what is in your bank account.

Now scroll down a little ways to A19 and type “Total”. Select all your expense columns again by clicking on B3, hold and curse over to the end. Press Ctrl and the C key to copy this whole row. Click on B19 and press Ctrl and the V key to paste the copied information.

You should now have a duplicated row of your expenses. I like to make this a different colour, red, to show it’s importance.

**QUICK TIP!** A great way of making your spreadsheet easier to read on your screen, make the columns shorter in width. To do this, move your cursor between B & C columns your cursor will change to an adjustment symbol. Click and drag the columns closer together.

We now begin with the formulas required to calculate all information. (the fun part!!)

##### Step 2 – Setting up the Formulas

We begin by clicking on B20. This row will show the ongoing totals for each of the expense columns. At any given time you can scroll down to this row and see if you will be over or under for that particular bill payment. This helps if you need to move money from one column to another at any time because it shows the current total of what you have budgeted.

The formula we will be using throughout the spreadsheet is “=sum(A1:A18)” this example adds everything from A1 to A18 and shows the total where you typed the formula. If ever your calculations seem really off, it is usually a matter of your formula selecting the wrong columns to calculate.

You can type the columns out or you can click and curse over. In B20, you can begin to type “=sum(” then click on B4, click and drag to highlight all the columns down to B18 and press enter. This should automatically update your formula to “=sum(B4:B2)”.

##### Step 3 – Input Pay & Bill Schedule Information

Now we begin to input the known information for the month this includes the bill dates and paydays. I make my pay days black and my bill dates red just to know which is which. My bills come out roughly the same three dates (give or take a few days) over the course of the month. If you want you can make a row for each bill date if you wish, it just means more rows. To add rows click on the row number (ie: 8) right click on your mouse and select “Insert 1 Above” to add.

Click on A4 to begin by typing the date. Fill in all your known pay dates and bill schedules.

At this time you can also input the formulas under the Total column. Click on L4, type without quotations “=sum(B4:J4)” and hit enter. If done correctly this should show an automatic “0”. Leave the Bank Account box blank for now as it is slightly more complicated.

Before we begin to input dollar amounts, it might be a good idea to give yourself a row of information as a note. Click on the second row column (2) right click and select “Insert 1 Above” to add a new row. Do this twice for two rows. Save these blank rows for just a moment.

##### Step 4 – Start-up Dollar Amounts

Using our first blank line, input the total amount you require for each column each month. Using the second blank line, divide the total amount by 4 (roughly 4 weeks in each month) to give you the amount you will need to use in your budget each week. IE: Rent = $700 / 4 = $175

To show a total at the end of your two reference columns, click on L2, input your total sum formula “=sum(B2:J2)” and hit enter on the keyboard. Do the same for your second line “=sum(B3:J3)”. These column numbers will differ depending on what bills you have to budget.

Now you can see what your expenses are each month (what money you need to come up with) and what your weekly budget amounts will be.

##### It’s Best to Over-Budget

Now as my father would say, its better to have too much than not enough. Look at the numbers you have typed in those two rows. Some of your expenses, such as utilities, phone, groceries, gas – will fluctuate. Better to be safe than sorry so budget these “unknowns” a little higher. For my utilities I was quoted $250 worst case scenario. I setup my budget for $280 to be on the safe side. To my shock, the rates had increased since their first quote and my worst case scenario ended up being $300. Luckily that month I was okay financially because I had been over-budgeting in the lower months so I had the overflow of cash already in that column waiting to be used.

Over-budgeting may sound like a waste of your hard earned cash but I assure you, you will be so thankful if you ever run into a problem you have that money already available. Take the numbers you placed in your budget prep row and round up: $5, $10 even $20 for something like utilities that could be much higher.

To begin your budget is a little tricky but I assure you in a month it’ll be free-flowing! In your first row title “*Current*” scrolling down to M1 (or whatever letter your *Bank Account* column is. In this box type your current bank account balance, for example I have used $2000. I recommend having a separate account for this budget, with PC Financial I can add multiple accounts under the same account so I have a chequing (for every day use), a savings (for my budget), a high interest savings (for savings) and a second high interest savings (for my retirement fund).

##### Begin Using Your Budget!

Because the first month is the hardest as you are jumping in with scattered finances and bill dates, we need to add an additional row to show bills that as of the first of the month are already taken care of (by your income of last month). By next month this will be flowing much easier!

Click on your first budget row, A5 right click and click “Insert 1 Above”.

Assuming our bills are due as follows:

- On April 1st: Rent ($700) Phone ($60) Car ($150 biweekly)
- On April 10th: Utilities ($200) Insurance ($100)
- On April 15th: Internet ($40) Car ($150 biweekly)

The other remaining expenses are flexible and may not be used every month.

To begin the budget we need to already have the full amount for some of these bills due to when they fall within the month. For April 1st, we need to have the full amount of rent, phone and half of the car payment. In our new blank row in the first column of dates type “Start” so we remember this is our starting balance row. Next input the amounts for each bill that are to be paid on the 1st of the month.

For argument’s sake, let’s assume we have $2000 in our budgeting account on March 31st (as per our first row in the budget spreadsheet). At the end of our starting row, in the total column using our formula “=sum(B5:J5)” to give us the amount of the bills to be paid that first week. In the Bank Account box (M5) type 2000.

Now to show that these amounts have been removed from our account, we go to our first official row of bill payments, April 1st. Under each bill we type a minus (-) directly in front of the amount to be removed. In the total column using our total formula, type “=sum(B6:J6)”

In the Bank Account column using the addition formula “=sum(M5+L6)” which will deduct the amount of the total column from the original bank account balance ($1090).

##### Using Your Weekly Budget

Suggesting that we are paid on a weekly basis (nice and easy!) April 6th is our first week of moving money for our budget. As per our outlined budget amounts we calculated earlier, each column we will in the amount. (Rent=180 Utilities=70) for a total of $550. In the Bank Account column use the formula to update the balance “=sum(M6+L7)” for a total of 1640.

You can also look at the red totals section at the bottom of your spreadsheet and see the amounts changing. You can immediately see if you will be short for your next bill!

Now for the second set of bill payments we need to look at the Utilities and Insurance columns. See the red totals section for quick reference. We need to have $100 for Insurance (we are short $70) and $200 for Utilities (we are short $130). Assuming we already have this saved from last month we can add it to our starting line to keep things organized and correctly added. Next month you won’t be using this “starting” line at all.

Because we added rows after creating our formula for the red totals at the bottom you may need to update the numbers ensuring they start at B5 and not B6 as per the original sheet. Otherwise your totals will be off!

Now that we have added these amounts to our starting line we have enough money in that column for the two upcoming bills.

##### After Your First Month

Click here to continue learning more about this type of budget by reading the second post!

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