Frugality & Budgeting – the Perfect Marriage

Trying to be a frugal ninja without setting and keeping up with a personal budget plan is like being a blind vegetarian randomly picking out TV dinners from the frozen food aisle. Hot pockets…

More important than tracking all of your actual expenses is simply documenting all sources of income and average monthly expenses. There are lots of beautiful, shiny personal finance applications out there that can help you keep track of things, and they definitely serve a purpose when used effectively. However, I’ve found that the most effective thing is a plain ole’ budgeting spreadsheet.

Budgeting Made Simple: The Budgeting Spreadsheet
I’ll share the budgeting spreadsheet that I use. Feel free to make a copy of your own and modify as you see fit.

Here’s a Google Docs Budgeting Spreadsheet. You will not be able to edit this spreadsheet without copying it first. In order to save and edit your own version of this spreadsheet, select ‘File’, and ‘Copy Spreadsheet’. Now you should be able to edit your own version in Google Docs.

Additionally, here’s an Excel Budgeting Spreadsheet version for your downloading pleasure.

Using the Budgeting Spreadsheet

Step #1: Add in your income. Grab your W2 and go at it! If you get bonuses or other period income, add that to the appropriate month. There is a row for one-time additions.

Step #2: Total up your Expenses. If you don’t use much cash like I do, this can be a lot less daunting than it might seem. You can split up your expenses into different categories by going through your bank statements and credit card bills. Additionally, online applications like Mint.com can do this for you automatically.

Step #3: Prioritize & Start Getting Frugal: The great thing about a personal budget is that it opens your eyes to where you can cut back in some areas to free up more cash. This is where frugality gets really fun.

Frugalhead Discussion:

• What tools do you use to budget?
• What is your favorite online personal finance app?

Want more Budgeting & Other MicroFrugality tips?