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Budget Template

How to use a Budget Template to Manage and Save Money

If you feel like your money disappears at an alarming rate each month, you’re not alone. Recent economic changes have put significant stress on personal finances. Not only are you feeling the economic effects of a global pandemic, but your income also needs to stretch to cover inflation, interest rate hikes, and the high cost of housing.

When your finances get stretched, your stress level often does too. Fortunately, there are ways to take control of your finances to make sure you can manage your expenses. One of the easiest ways is to create a budget using a budget template.

The Value of a Budget

Despite all the benefits of a budget, about 51% of Canadians don’t have one. People often have a lot of reasons for not budgeting. Therefore, it’s important to understand what a budget is for, how it can help, why some avoid budgeting, and how a budget template can simplify the process.

The Purpose of a Budget

Your budget is like a financial GPS. It tells you where you are, where you need to go, and how to get there. A budget offers three key benefits. It shows you:

  •  How much money you have coming in
  •  How much money you have going out
  •  If your money and priorities match

With a budget, you will know exactly where you stand financially. Without looking at the numbers, we  can sometimes overestimate our income, underestimate our expenses, and spend money in areas that don’t bring us any value. A budget can highlight things like unused memberships or subscriptions that could be cancelled.

The Benefits of a Budget

Once you have your basic information, you’ll know where you are financially. You can use your personal monthly budget to manage expenses, identify gaps or shortfalls, and set goals. Knowing how much money you have each month lets you know how much you have to spend. Some categories are pretty stable from month to month and unavoidable, like rent or mortgage, utilities, and insurance. You’ll have more flexibility to adjust spending in categories such as entertainment and groceries.

After creating and working with a budget, you’ll know if there are areas that need attention. If you find that you are short every month because your income doesn’t cover your bills, you’ll be able to see if there are areas where you can reduce expenses. Another option might be to see if you can increase your income.

A budget is an excellent tool to help deal with recurring expenses. Some expenses occur regularly but not monthly. Regular but infrequent expenses that can impact your budget are things like furnace maintenance, property taxes, or an annual vacation. A budget can help you plan for these by setting money aside on a weekly, bi-weekly, or monthly basis. Doing this will allow you to cover these costs without feeling cash strapped or having to borrow.

Last but not least, a budget can help you reach your financial goals. Those who have a budget and follow it are typically better off than those who don’t. They can meet their monthly financial obligations more easily without going into debt, and they often find money to set aside for short-term and long-term goals.

Why you might avoid budgeting

With all the great reasons to budget, why doesn’t everyone have one? Well, here’s a few of the reasons:

  • They don’t know how to budget money
  • Someone else in the household takes care of the finances
  • They’re fearful of their financial situation
  • They hate paperwork
  • It’s boring
  • It feels restrictive

Learning how to budget can be done quickly and provides many benefits. Additionally, when the whole household is involved in the budget process, everyone will have an understanding of the financial picture. While it’s common for one person to manage the finances, it helps when everyone works together to reach common objectives.

Creating a realistic budget can take the fear out of your finances. You’ll know where you stand, if you are meeting your expenses and if you need to make changes. While it can be a bit scary at first, once you know your situation, you’ll be able to take control of it.

Yes, paperwork can be boring but your finances touch many aspects of life, impacting your physical and emotional well-being. Once you set up your budget, much of the boring part will be done.

Creating a budget shouldn’t feel restrictive. In reality, it’s a spending plan that can help you manage your money and reach your goals. It’s also something you can adjust if you need to as your circumstances change.

Using a Budget Template

So, what is a budget template and how do you use one? A budget template is a spreadsheet you use to keep track of your income and expenses. They can be manual or automatic. A manual one will take more effort to keep track of your money than an automatic one will.

There are several free ones available, including the Excel budget template if you have Microsoft Office. In addition, there are some apps that offer a similar service. With these apps,  you can link your accounts and the budgeting app categorizes your expenses for you.

Both types have some similar features, whether you use them manually or automatically. Each one requires you to set your categories such as income, utilities, debt payments, restaurants, child care, and pet care. Some budget planners let you create a category for estimated expenses to compare your actual spending to your estimated costs.

With a manual budget, you input the values into your spreadsheet. An automatic budget template links to your accounts (bank or credit cards) and will automatically download transactions populating the categories for you. Some budget templates will also give you alerts for spending, reminders of bill payments, and track your investments. You can get a complete picture of your finances with these added features.

Using your budget planner will tell you how much you are spending. You’ll know if you need to budget more for some categories and reduce it for others. If your income is more than your expenses, you can budget money for savings. But, of course, a shortfall will also be reflected.

Reach Out If Your Expenses Exceed Your Budget

Using a budget template may have shown you that you are carrying more debt than you can sustain. If your cost of living is more than you can afford, leaving you feeling overwhelmed by your debts and expenses, you can reach out for help.

A licensed professional can work with you to develop a strategy to improve your financial situation.  Contact Adamson and Associates for assistance. A free, no-obligation consultation with a Licensed Insolvency Trustee (LIT) from Adamson and Associates will help you understand your options to manage your debt.

John Adamson, Licensed Insolvency Trustee Ontario

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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