How To Create A Personal Budget Easily

I just wanted to explain how quick and easily I set myself up to start budgeting and becoming financially responsible, and working towards becoming debt free. (On the goal to financial freedom, I spent no money yesterday!)

Here are some posts that I used to help me plan, give me inspiration, or were very relevant in quest for debt freedom:

  • The Simple Dollar blog – A great blog with tips on frugality, planning, and finacial advice. I like it because it is written for the common individual. It also gives some great suggestions rather than just point out the obvious.
  • Yielding Wealth blog – I use this to look to the future. I want to at least start learning about how I should build wealth after paying down my debts. I want to continue my financially responsible lifestyle after becoming debt free so that I can build personal wealth. Great resource of information for just that.
  • Joyful Abode – I got linked to Joyful Abode through Twitter and she has been extremely supportive of my process. I found some great cooking tips on her website and other ways of saving money around the house. Learning how to do things for yourself, such as cooking, will save a lot of money over time.

First of all, I want to emphasize that this is something you have to train yourself to do. It’s not something that comes easily, and you have to get yourself some outside pressure to make sure to hold yourself accountable. That’s the reason I have this blog, it forces me to answer to someone, my readership.

Once you decide that it’s time to get serious, quit procrastinating, and finally take some action, it can be frustrating. The key is to realize that power comes with knowledge. You have to educate yourself on your complete financial situation in order to tackle it. Not understanding your enemy will make the enemy much more intimidating, or underestimated than it needs to be. To truly tackle your situation is to understand it.

I first began by laying out all of my costs:

  • Rent
  • Water
  • Gas
  • Electric
  • Cable
  • Car Payment
  • Car Insurance
  • Gym Membership
  • CD Subscription (for work)

I then laid out some variable costs into a few quick categories that I know I spend money on monthly. These are the categories that I feel that I have immediate control over. I plan on adding more as I continue, but for now:

  • Groceries
  • Dining
  • Credit Card Payments
  • Clothes
  • Gas
  • Medical

I now have two tables that I can reference how much I am spending. On the left I laid out the months Jan-Dec and on the top labeled each category. After the completion of the month I will put in the amount of each category. In order to keep track of my daily expenses, I bought a book similar to this monthly bookkeeping ledger available at Staples or Office Max.

I then created a quick table laying out my income. I put all of the months on the left and two categories at the top, DJing and Serving (my two main sources of income).

Before I begin here are some great links to some pages that helped me plan, gave me inspiration, or were relevant to my master plan:

The last table is the most important. I created the Budget Table that has total income, total spending, and money saved for each month. This will give me a great visual on how I did for the month. I plan on working on these bi-weekly as well just to gauge how I am budgeting for the month.

I have this all laid out in an Excel spreadsheet with formulas to automatically calculate the necessary numbers. This only took me about a half hour to put together, but if you e-mail me (thedebtguy@gmail.com) I would be happy to e-mail it to you.

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2 Comments on “How To Create A Personal Budget Easily”

  1. Miranda Says:

    Thank you for the link. And for the great post outlining out to create a budget. I personal like to use personal finance software, since it automatically generates reports and what not (I’m not a huge fan of using spreadsheets).

  2. thedebtguy Says:

    What software do you use and what specific features do you find the most useful?


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