Tunabudget - budget worksheet mechanics
Use your favorite electronic spreadsheet; if you don’t have access to a computer, you can draw rows and columns. It’s that simple. Basically, at the top of each column, you’re going to list the date(s) that you expect to receive income, and below that, the amount(s) of income – take home cash. It’s all about the cash. As for the rows, you’re going to list the expense categories for your very own life. How’s that? Isn’t that simple?
The pay periods are for every date you expect to receive income. If you get paid twice a month, put those pay dates in the worksheet. If there are two incomes, and both get paid twice a month, put those dates in too. All income needs to be accounted for.
The net take-home cash amount is to be listed. That’s the amount you actually have available to spend to take care of expenses, debt repayments, savings, etc.
If there are other sources of irregular income, say a tax return, or the pending sale of an asset, list that expected income amount on or about the date you expect to receive the same.
Total Net (actual) Cash Income
The spreadsheet template should be set up to automatically calculate the total actual cash income expected for any pay period listed in the spreadsheet.
Balance Sheet Summary
The spreadsheet includes a simple summary balance sheet so that assets and liabilities can be accounted for on an ongoing basis, the difference between the two, being one’s net worth. Additional rows can be added to achieve the level of desired complexity.
To keep budgeted expenses and repayments in context, the ‘monthly’ amount is listed. As you pre-spend each of the paychecks, the monthly amount is pre-spent (i.e., half the amount in the first check that month, and the other half in the second check that month). You can auto-pay the amounts from a checking account, or save up the amounts in cash and pay in cash.
Your expenses should be listed in their order of priority of importance. For example, typical household expenses and repayments, in this case in no particular order, may include: Religious contributions; savings (short-term, emergencies); savings (longer-term, Christmas, vacation, investments); mortgage or rent; utilities: natural gas, electricity, water/sewer; insurance (auto, life); grocery; cell phone; internet; cable TV;; dentist; doctor; hospital; auto loan; credit cards.
The spreadsheet will automatically calculate the total expenses.
Finally, the total expenses will automatically be subtracted from the sum of the total net (cash) income and the difference will be given. If a negative number is shown, is means the expenses exceed the income. If the number is positive, there is surplus income. Now, because it’s a spreadsheet, you’re going to be able to initially pre-spend the first several months of your income and expenses. If there’s a deficit of income at the bottom of any given ‘paycheck’, see if you can pre-spend yourself out of the deficit over the ensuing paychecks. In those cases where it’s not possible to spend your way out of a deficit, structural changes will be necessary. Make possible and desired changes on the expenses (or income) until you figure out what you need to do, or what changes will be necessary, to get the worksheet to balance. If you have a surplus, you’re fortunate, and do with it what you will.