This is 3–6 months of expenses and will protect you against bigger emergencies, like job loss. When the debt’s gone, you need to save up a fully-funded emergency fund (Baby Step 3). If you’ve got debt (which I’ll cover later) keep that emergency fund at $1,000 until you’re debt-free (which is Baby Step 2). (I call that a starter emergency fund, or Baby Step 1.) This puts a cash buffer between you and those life happens moments. Since budget percentages for these can vary, let’s talk through each one.Įmergencies: Set aside $1,000 in the bank right away. When it comes to the savings category of your budget, think about these three reasons to save: emergencies, big purchases and wealth building. How much you’re putting in savings each month depends on several things! 1 But this is a great example of how a percentage or even an average shouldn’t set a standard for you. If you’re wondering what’s typical here, the average American saves around 9% of their income. (Aka how to win with money.) The Baby Steps tie in with how much you should spend in a few of these budget categories-especially savings. This is the proven, guided path to save money, pay off debt, and build wealth. Heads up: I’m about to talk about the 7 Baby Steps. So, before we dive in, here’s an overview of the budget categories we’ll cover in this article: Look up your own! Open your online bank account or get out those bank statements and see what your past spending reveals. Or maybe a category is like a playlist, and the lines are like songs.Īlso, if you’re reading this as you set up your first budget, don’t stop with the numbers I’m about to give you. If those words are new to you, think of a budget category as a folder, and the budget lines as files inside it. Let’s break down some national averages and budget percentage recommendations for common budget categories and budget lines. Guidelines for Setting Your Budget Percentages So, I’ve pulled them together with other helpful info to guide you as you’re setting up (or fixing up) your budget! Are you ready for this? Because your life isn’t one size fits all! How much you should spend on this and that in your budget can vary depending on your income, household, location, goals, lifestyle-so many things.īut there are a few standards to follow. Home Budget - Our original selection of home budget worksheets.If you’ve never budgeted before-or you’re wondering how your spending compares with everyone else’s-you might wish you could see some recommended budget percentages, national spending averages, and other helpful stuff like that all in one place.Īnd listen, I’m not about to give you a one-size-fits-all budget percentage guide.Family Budget Planner A yearly budget planner, with the same categories as the household budget spreadsheet.Household Budget Spreadsheet (monthly) - More detailed and includes child expenses.Personal Budget Spreadsheet The 12-month version of the above spreadsheet.Money Manger - A more advanced budget management tool for Excel.After making a change, you should check the formulas to make sure they are still correct. If your Net is negative, that means you have overspent your monthly budget.Īdding or Removing categories: You need to be careful when adding or removing categories, to avoid messing up the formulas used for calculating the totals. The Monthly Budget Summary table in the upper right of the worksheet totals up all your income and expenses and calculates your Net as Income minus Expenses. So, if you spend more than you budgeted for, the value in the Difference column will be red - to help it stand out as a warning. The spreadsheet uses the accounting format where negative numbers are in parenthesis like (115.00), and conditional formatting is used to make the negative numbers red - red means bad in this case. The calculations in the "Difference" column are set up so that negative numbers are bad. Using the Personal Monthly Budget Template See our articles Make a Budget and 5 Basic Budgeting Tips if you are just getting started or new to budgeting. At the end of the month, you record in the "Actual" column how much you really spent during the month.įor a more detailed set of budget categories, see the Household Budget worksheet. This represents your goal - you're trying to keep from spending more than this amount. You record your desired budget for each category in the "Budget" column. The purpose of this type of budget worksheet is to compare your monthly budget with your actual income and expenses. Some numbers are included in the Home Expenses category as an example, but you'll want to replace those numbers with your own. To use this template, just fill in numbers that are highlighted with a light-blue background (the Budget and Actual columns).
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