Creating a Monthly Budget Worksheet (How to use the Envelope System)

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Are you curious about creating a monthly budget worksheet?  Keep reading ~ I'd love to help you with this one (and know it will change your finances!)

How to Create a Monthly Budget Worksheet

Note: this Monthly Budget Worksheet can be found in our Money Planner on page 33 which we'll be using throughout the More Money Challenge as we work on our budgets and taking care of our finances all month long! Learn more about the Money Planner over HERE.

It can be so hard to keep track of your finances when you're juggling a million different things. But creating and following a monthly budget is one of the most important things you can do for yourself and your family. Luckily, it's not as hard as it sounds! All you need is a little time spent on your monthly budget worksheet to help you keep track of your income and expenses.

So what exactly is a monthly budget worksheet? 

A monthly budget worksheet is a way for you to keep track of where your money is going each month.  It will help you visualize exactly what you're paying in expenses and what you're bringing in in income. It will also help you to see where you may need to cut out a few things to make it balance. It is just way too easy to overspend when you don't have it written down onto paper where you can see it!  Having a monthly budget is one of the most important things you can do for your finances.

It might take a little time to get your monthly budget worksheet done each month, but I promise it will be worth it!

Don't get discouraged as you get stared, just take time to start filling it out, line by line.

Let's get started!  First you will want to list out all of your spending categories.  Here are a few examples:

• Charity
• Savings
• Housing
• Utilities
• Medical
• Clothing
• Personal
• Transportation

Once you have all the categories listed out, then you can go ahead and list each expense beneath the appropriate category.  If you don't know how much to list for each item just estimate to your best ability based on previous spending.

Once you finish listing all your expenses for the month, add them all together using a basic calculator.  Enter that amount at the bottom, and label it expenses.  Subtract that number from your monthly income.

Now, this is the REALLY important part.  When you subtract your expenses from your income, the total should be ZERO!  If this is your first time trying to create a budget, then you might not be right at zero the first time.  You could be in the positive or in the negative.  That is OK!  Keep reading to find out how to make that final number zero.

What if the bottom line is positive?

If your number is over zero, then you're in a great position!  You can take that extra amount and add it to one of your savings categories.   Your goal is to spend every penny you earn SOMEwhere – so add it to a budget goal like vacation fund, put it towards a bill, or add it to your emergency fund (or splurge and order a pizza!) The trick to a budget worksheet is that you get to choose what you do with your money ~ your money can't tell you any longer what to do!

What if the bottom line is negative?

This means that you have more money going in than coming out and you need to determine which categories you can pull from to make that number zero.   That might mean you need to cut out something in your budget or maybe even a few things.  This can be easier said than done, but remember, you have to start somewhere in order to reach your destination.

Now that you have your zero balanced budget you are well on your way to getting control of your finances, and all that you need to do now is just stick with your budget amounts.  One way to help in a huge way with keeping within your budget is using the envelope system.

What is the Envelope System?

The envelope system is the practice of creating envelopes for certain budget categories, and adding just the budgeted amount to that envelope each month in cash.  Once the money is gone from the envelope your budget for that category is gone, and you need to wait until the next month to spend more from that category.  This is a really neat way to actually see how quickly you are spending your money, and also to keep you on track with your budget.

It can be tough to get started with a monthly budget, but using the envelope system is one of the best ways to zero balance your budget and make sure you have enough money for the month. Here are a few tips on using an envelope system that might help as you're starting out:

• Decide which items you'd like to pay cash for ~ in our home in the early years we chose to pay cash for groceries, eating out, hair cuts, clothing, and gifts. We still pay cash for groceries and eating out, but do what works for you.
• If we have extra money in one category for a month (for example clothing), we'll save that money to use the following month on the same category.
• If your finances are in great shape, a cash envelope system might seem absolutely crazy to you. But if you've read this far my bet is you'd like to save some moo-lah, and the truth is it just hurts more when you pay with real cash instead of a debit card. Try it for a month. See how it feels for your family. My bet is you'll be shocked at how much you save simply by changing to using cash alone, so consider giving it just 30 days to test out.

In case you're curious, this is the case I'm using for my budget envelopes. 

An alternative to the envelope system if you pay with your debit card regularly: 

If you use a debit card regularly (like we often do!) consider using envelopes to put your receipts in after making a purchase. Add any receipts after you shop to an envelope (for example for groceries, gas, clothing, hair care, and gifts), and easily track how much you really are spending each month. This is a simple way to mange your expenses easily, and get a clear idea of how much you're truly spending each day.

Now you know how to create a monthly budget worksheet that will help you zero balance your budget and live within your means. Now it's time to get to work on creating a budget that will work for you and your family ~ I'm cheering for you all the way!

 

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While I sure don't want to pressure you AT ALL to purchase something out of your budget, I know our Money Planner can help, and we have a CRAZY Bundle Deal going on right now. If you're unsure of where to start and just want a simple guide to managing your home and finances, I know this will be the best money you spend all year and it includes our Money Planner Masterclass and Grocery Savings Workshop!

YOU CAN DO THE HARD THINGS like writing a budget (I promise!) Leave a comment if you have any questions too ~ I sure do love hearing from you!

New to budgeting and don't know where to begin? Here are a few posts that might help:

Finance February Challenge Information

Pantry Cooking Challenge (Finance February Challenge)

How To Calculate Your Net Worth Worksheet (Finance February Challenge) 

How to Grocery Shop on a Budget

Don't Sacrifice What you Really want for something you want right now