In this post, I will share with you how I setup my budget and how I track my finances overall.
Purpose for a Budget
Everyone must have an objective for creating a budget. That objective can be to track expenses to see where the money goes. In my case, I do it to align to a goal and help me track whether or not I will meet it.
Tracking Expenses
First, before trying to create a budget, you MUST know what your finances look like today. I use a program called GnuCash to track every penny I spend. I’ll warn you, it’ll be a little overwhelming to the average user since it follows standard accounting best-practices (credits, debits, etc.). And everything is manually entered, which is something most people aren’t into doing.
If GnuCash overwhelms you, try Mint.com. It’s completely online, and automatically organizes transactions by category. I strongly recommend this for the beginner.
Plan your Budget
Once you are tracking your expenses for a month or two, you’ll start to get an idea on where your money goes. This will be the foundation for your budget.
Using the data, I use an Excel spreadsheet and manually enter what I think I’ll spend in each category – broken up by month. So if GnuCash tells me I spent $100 in January for gas, I enter $100 for each month until the end of the year. I do this for every expense, income, contribution to investments, etc. When finished, it’ll look something like the spreadsheet file below.
The template is quite thorough, but by no means includes everything you would need – so you’ll have to add and remove rows as appropriate.
My Budget World 