Budgeting For Beginners | How To Create A Budget From Scratch (2024) | Onlyinvesting.info

A step by step guide on how to create a budget from scratch with free Excel spreadsheet!!

FREE SPREADSHEET TEMPLATE:

*(To make copy go to “FILE and MAKE A COPY”)*

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Chapters

00:00 Start Here
00:49 Step 1: Get Set Up
02:02 Step 2: Track Your Expenses
05:14 Step 3: Subtract Spending From Income
07:02 Step 4: Analyze Your Expenses
11:14 Step 5: Create Saving Goals
12:33 Step 6: Constantly Revisit And Revise

Creating a budget is something that empowers you to have the control over your financial situation. In this video, I give a step by step guide on how to create a budget from scratch.

Step 1: Get Set Up

Before you begin creating your budget, you first need to gather up the materials you need that allow you to create it. The first thing you need is all of your statements that have your spending from the last month like bank statements, credit card statements, and debt statements. The second thing you need is to open up the free spreadsheet linked above. To create a copy click “File and Make A Copy.” Now we can begin creating our budget.

Step 2: Track Your Expenses

The first step to making a budget is to take the time to track all of your expenses from the past month on the spreadsheet. This is something that will take time, but will allow you to see the entire picture of your financial situation. First, fill out the date and expense you made. Next, in the “Expense Category” column, choose the correct category for the expense. Then, in the “Spending Type” category, choose if it is a “Fixed Expense,” meaning the expense is the same amount each month like rent; or “Variable Expense,” meaning the expense is a different amount each month. Next, choose if it is a want or need from the “Want/Need” column. Finally, put the exact amount down to the penny in the “Amount” column.

Take the time to write down all of your expenses from the past month and off to the side, the charts will automatically populate giving you a clear picture of your finances.

Step 3: Subtract Spending From Income

A sustainable budget is one where you are spending less than you are making. To figure this out, you simply need to subtract your spending from your income. On the bottom of the spreadsheet is a tab labeled, “Budget Breakdown,” go to that sheet. The first table you should put your income sources. Off to the right the information will automatically populate and it will give the amount remaining. If you are spending more than you are making, then you need to analyze your budget.

Step 4: Analyze Your Expenses

Since we tracked all of our expenses on the spreadsheet, we can easily analyze our expenses to see why our budget isn’t sustainable and how to fix it. In order to do that we need to review three things. The first is want/need spending where we can simply cut out our wants to save money. The second is our variable expenses where we can analyze if anything can be lowered or cut out. If there is something that can, go to the “Budget Breakdown” tab and record it on the “Variable Expenses Savings” table. The third is our fixed expenses and see if anything can be lowered or cut out. If there is something that can, go to the “Fixed Expenses Savings” table to record it.

Once you analyze the different things you can save money on and input them in the tables, it will automatically populate on the blue table and you can see if you budget is sustainable with the savings.

Step 5: Create Saving Goals

Once you create a sustainable budget where you are no longer spending more than you’re making, you can create savings goals. On the spreadsheet there is a tab labeled, “Savings Goals,” this is where you will record your financial goals. On the top is the amount remaining after all your bills are paid and you can use that to create realistic goals.

Step 6: Constantly Revisit And Revise

There never comes a point when you are finished with your budget, but it is something that you need to constantly revisit and revise to make sure you are living in a sustainable way. Over time your lifestyle and spending habits will change and so you have to constantly be updating it. However, once you create a sustainable budget, it will empower you to have more control over your financial life.

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **