Notice that cells that house essential expenses are blue, savings goals are green, and incidental expenses are red.Īn equation in the "% Budget" column tells me how much money I have to spend in that category. In this specific example, the total amount was a little over $2,300. In the cell labeled "Amount to Date," I totaled each month's estimated income. We’ll go into more complex budgeting for freelancers and solopreneurs next week, but right now, I've provided the following sample budget from my former 9-to-5 life for your reference. I like to track my budget in a plain old spreadsheet, the same one where I balance my checkbook. Tracking Your Budgeting Percentages in a Spreadsheet. For example, $900 monthly rent divided by $2,000 monthly income = 0.45, or 45% of your monthly budget. You can do this by dividing the expense by your income. While you may know about your best friend’s birthday dinner weeks in advance, there’s always a last-minute invitation to come out on a Saturday night.įinally, break these anticipated expenses into percentages of your overall expected income. Next, make a list of every expense you anticipate having throughout the month. I like to allot up to $200 for unknown incidentals if possible. If you are salaried or have regular hours each week, this should be relatively easy to calculate. To determine how your monthly expenses fit the 50/20/30 Rule, first write down your overall expected income for the month. They include such things as dining out, shopping sprees, gym membership, Netflix and Hulu subscriptions, travel for pleasure, books, movies, and other entertainment purchases. Incidental expenses are also known as “fun money,” and for good reason. Savings and debt payment can include saving for retirement, investing in a stock portfolio, paying down student loan debt or credit card debt, and saving for a big goal like a mortgage down payment, a new car, emergency savings funds, or a big trip. This includes line items like your rent or mortgage payment, groceries, necessary clothing purchases (think of new work shoes when you’ve worn through the soles of the last pair), and transportation costs like car insurance and gasoline or a MetroCard. Incidental Expenses (30% or less of monthly income)Įssential expenses are expenses you can't live without. Savings/Debt Payment (20% or more of monthly income) What this breaks down to, essentially, is allotting percentages of your anticipated monthly income into one of three categories:Įssential Expenses (50% of monthly income) One way to make the hard numbers easier is the 50/20/30 Rule. This way, instead of automating a computer to break down your budget, for which you might turn off push alerts if you feel guilty about your spending, you’ve got to get in there, learn your spending habits, and crunch the hard numbers yourself. While it’s great that computers can help you track your spending, I encourage you to prepare your budget via Excel spreadsheet at the beginning of each month. For instance, money tracking apps like Mint and You Need a Budget (YNAB) come to mind. These days, there are a great many resources to help you track your budget.
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