If you’re searching for a budget template online, there’s likely a reason.
Perhaps, like some of us, you’ve fallen behind on your finances. Your debt repayments have snowballed, and you might feel like you’re struggling with where your money goes each month. Or, maybe you’re in the opposite boat — you’re hitting your stride financially and you have excess cash flow. You want to make sure everything is going where it should be while also maximizing how you use your extra money.
Luckily, regardless of which financial position you’re in, we have a budget template that will work for you.
Most personal budgets, like long-term diets and New Year’s resolutions, eventually fail. This is typically because they’re too complex, leaving people feeling as though sticking to the budget is too exhausting and burdensome.
But budgeting shouldn’t be a strict exercise in financial restraint. Instead, it should be about exercising control over your money so you can meet your future financial goals.
Below, we offer a detailed budget template. This free budget tool will allow you to know exactly where your money is going so you can course-correct as necessary. It’s best to think of this not as a strict monthly budget you must follow, but rather as a budget tracker that will help you manage your money.
Novi Money 50/30/20 Budget Tool
This two-part spreadsheet will allow you to keep track of your finances in one convenient place. Our budget worksheet is ideal for those who do well with structure and organization and prefer to follow a detailed guide for budgeting. (If sticking to a strict budget planner makes your eyes roll or stresses you out, we offer advice for a simple, less-structured budgeting option below.)
You can either work off of the budget template directly from Google Sheets by making a copy, or you can download a copy to use in Microsoft Excel.
The Novi Money 50/30/20 Budget Tool is composed of two templates.
- Your Current Spending: This template will help you assess where your money is going right now.
- Your Budget and Money Management: This template will help you create a budget you can actually stick to.
Below, we offer a step-by-step guide for how to effectively use these templates to create a budget that works for you.
Step 1: Know Where Your Money is Going
The first step in budgeting is knowing exactly where your money is going, which is why we created the first worksheet.
It’s easy to lose track of things, especially automated expenses like Netflix subscriptions and gym memberships. But it’s also easy to track and categorize your spending with data downloaded from your checking accounts and credit cards. Aim to gather three or six months’ worth of data, assign each expense to a category, and take an average monthly figure. Input these average monthly expenses (as well as your monthly cash inflows) into the spreadsheet.
Expenses are broken into three categories:
- Needs: Rent or mortgage payments, debt repayment, commute costs, insurance, utilities, credit card payments, and other necessary monthly expenses
- Nice-to-haves or wants: Travel, shopping, dining out, etc.
- Savings: Retirement savings, emergency funds, etc.
Once you input everything, review and analyze the data. Your cash inflow from your salary should generally match the outflows of expenses and savings. Are there any surprises? Any expenses that represent a high percentage of the total? Or that don’t align with what you value? Take note of these.
Step 2: Apply the 50/30/20 Rule
Once you’ve gathered your personal finance data, you’ll want to apply the 50/30/20 rule to your money. We like this rule because it’s easy to remember, and it allows you to exercise control within the above budget categories as you wish. Plus, this method can be followed regardless of how strict you want to be when it comes to the details.
It works like this: 50% should go toward needs (e.g. groceries, rent, and the minimum required debt repayment, such as for student loans or credit cards), 30% should go toward your wants (e.g. shopping and dining out), and 20% of your budget should go toward savings (e.g. retirement accounts and emergency funds) plus extra debt repayment.
The second template in the Novi Money 50/30/20 Budget Tool allows you to apply this rule to your finances in order to set a budget you’ll stick to. (In addition, we’ve included an example of a 50/30/20 budget for reference.)
Step 3: Identify Your Financial Situation
There are two common scenarios when it comes to motivation for budgeting. Figuring out which situation you’re in can help you stay on track with your household budget:
Scenario 1: You’ve Fallen Behind
You might fall into this situation if you’re struggling with money right now or you feel like your debt has gotten out of control.
If this describes where you are, you’ll want to prioritize your biggest “needs” expenses and figure out which “wants” can be reduced to create more cash flow to allocate towards paying down debts. For example, you might want to rethink your $150 fitness studio membership and opt for a $25 per month no-frills gym membership for now. Or, instead of shopping the posh aisles at Whole Foods, you might want to find less expensive produce market options. Closely examining which expenses you can cut back on will be an important step to get your finances back on track.
In this scenario, debt repayment will likely be an important part of your 50/30/20 rule. Prioritize paying off your high-interest debt first (such as credit card debt), and strive to pay more than the minimum each month. You can also consider applying part of your 20% to debt, just make sure you’re also contributing some money to savings. If you don’t have an emergency fund, creating one should be a priority.
If you feel like you’re so far behind that you need a little extra financial push, consider increasing your monthly income. This article on 29 methods for saving money fast is a good starting place.
Scenario 2: You’re Ahead
If you’re hitting your stride financially — you have stellar prospects and extra cash flow, and your net worth is growing with each passing year — congratulations! Although your priorities will be different than the above, still follow the 50/30/20 budget rule to help continue your success in this area.
First, if you don’t have one already, prioritize the 20% of the budget towards savings and create an emergency savings fund.
Next, figure out what you’d like to do with your excess cash flow. Consider increasing your savings for other goals, giving more than 20% to something like a home purchase, going back to school, maxing out your retirement savings, or investing. Or, you can move things around between your 50% “needs” and 30% “wants” categories. For example, if your “needs” are managed, you can add more to your “wants,” such as travel.
If your situation falls into the “financially ahead” category, just make sure you stay ahead by staying out of consumer debt, so pay off your credit card balances each month.
Step 4: Figure Out Which Type of Budgeter You Are
When it comes to budgeting, most people fall into one of two categories. Do you fare well with a strict regimen and don’t have trouble following a detailed personal monthly budget? Or, are you a big-picture thinker who thrives off of overarching ideas instead of nitty gritty, time-consuming budgeting spreadsheets?
Identifying which type of budgeter you are can help you stay on track toward your financial goals.
The Detailed Budgeter
You don’t mind the details — in fact, you thrive off of them. If you’re a detailed budgeter, focus on updating your spending plan and comparing it against your money management goals. If you’re in the first situation we covered above, do this comparison monthly or quarterly to see whether you are on track with cutting back on your spending and paying down your debt.
The Big-Picture Budgeter
You don’t want to dive into the details, and that’s totally fine. Just make sure you’re saving 20% or more of your income and paying off your credit card debt each month. If you’re doing these two things, then you can live on the rest of your money guilt-free. If you’ve fallen behind for now as described in the first situation above, consider carving out an accelerated debt repayment strategy and applying (or even increasing) that 20% portion of your budget towards extra payments.
For both types of budgeters, use the tools available to you to make following the budget plan easier. Pay yourself first by automating the 20% towards your savings with payroll deductions for your retirement plan (like your IRA or 401k), and by scheduling online transfers to your savings and investment accounts. Never miss a credit card or loan payment by scheduling your payments online. To accelerate debt repayment, schedule an extra payment that automatically gets transferred from your checking account. You might not even miss the funds, but you’ll surely celebrate as your debt balances go down.
Change usually doesn’t happen overnight, so be patient with yourself as you plan and implement the 50/30/20 budget. The important thing is to start and to direct your money towards these proportions over time.
It’s All About Perspective
Budgeting doesn’t have to be an arduous, tiring task you dread. Instead, think of budgeting as a form of awareness. After all, awareness about where your money goes is always a good thing, and it can be a great way to start managing your money.
If diving into the nitty gritty details of things and having a concrete monthly budget motivates you, then you’ll thrive off of our budget template. But if this tool feels like too much work, simply refer to the 50/30/20 budgeting rule, carve out your 20% towards savings first and then stay within the guidelines we outlined above.
Regardless of which strategy you use, you’ll become smarter about your money, reduce your financial stress, and be well on your way to achieving your financial goals. Kudos!