Budgeting: Free budget planner tool

Budgeting doesn’t necessarily mean scrimping and saving every single dollar your earn. Instead, a good budget is just a plan for managing your money and expenses, which can include spending on entertainment, luxuries and guilty pleasures.

Once you learn how to budget properly you'll have a better picture of your expenses and savings, so you’ll be able to spend money on luxuries without worry or guilt.

What is a budget?

A budget is simply a detailed description of what income is coming in and what money is going out; basically your savings and expenses. A budget looks at all your expenses, not just your regular bills but also your ongoing grocery costs, medication, entertainment and social expenses and so on.

A budget planner lets you see where your money is going, and gives you a clear picture of your saving and spending patterns.

How to use a budget planner

A budget planner is a tool that enables you to itemise and document all income and expenditure, as well as list and plan for future expenses.

The tool below is a free budget planner you can use online. Fill in your income and expenses for a quick and easy way of seeing how much you’re saving or spending per week, fortnight, month or year.

Free Budget planner

Free budget planner template

A budget planner is basically a table which lists different income and expense categories for you to fill in. Having it laid out like this makes it easier for you to ensure you’ve accounted for all your income and costs, and haven’t forgotten anything.

How to use the budget planner

1. To use this template, simply fill it in. You can do it all on the website, you can download it to fill out at your leisure or you can print it out if you want to see it on paper.
2. Once you've filled it in, click the printer icon to print it out and stick it somewhere you'll see it a lot (like on your fridge!)
3. For a blank budget template, simply download it without filling in any of the sections.

Tips for using a budget planner

The best way to use a budget planner is to commit to starting it at the beginning of a certain time period, such as the beginning of a new week or month. Here's some tips to get the most our of your budget planner.

Enter all forms of income

Include your salary, interest, dividends, investment income, any family allowance or benefit payments you receive, and even income from hobbies.

Identify all bills, including debt repayments, that come out of your income.

These are referred to as regular expenses and include rent or mortgage payments, car loan payments, credit card payments and insurance (life insurance, health insurance etc.) premiums. Car registration costs and school fees should also be included, as well as your electricity, gas and water bills. Remember, many of these are issued quarterly, so if you're creating a monthly budget, you may need to divide up your quarterly bill amount to give you an accurate monthly figure.

Analyse your past spending.

Look over your statements from the last three months and find payments for items such as food, entertainment, shopping, fuel and other varying costs. These are referred to as “irregular expenses” and also need to be included as outgoings. It is harder to plan for these types of expenses, but as you get a better control over your budget, you will have a better understanding of what limit to set for yourself. Tracking them over a monthly, three-monthly or longer period will provide a more accurate picture of how much they are costing over the long run.

Track and record your spending.

As the month progresses keep track of how much you spend on different items. If you use cash a lot, try and keep receipts so you remember where you spent your money. You can then divide these items into categories in your planner. Once you get into the habit of recording your expenses, it will become quicker and easier to manage your finances, and plan your household budget like a pro. You will be able to more clearly see where your money is going, where it’s coming from and how to make adjustments.

When you have finished your budget for the month, you should have a figure that shows how much money is left over for that period. This is your income minus expenses.

• If your budget shows a positive figure

If you have a positive figure, then you should first check it is correct. Check the amount of money you have left over in your bank account or wallet. If the figure doesn't seem accurate, then it probably isn't. If the figure is correct, then you can put that money towards your savings goals or debt reduction plans.

• If your budget shows a negative figure

If your budget is in the negative, then you need to have a good look at your spending habits and work out if it is all necessary. A negative budget means additional funds you have been spending have been adding to your debt. Having to pay interest on debt will make your budget tighter each month and may impact the level of debt even further.

What are the advantages of budget planning?

There are plenty of advantages to budget planning, but these are some of the most important ones:

• Spending awareness. If you don't have a budget in place then you will probably be surprised how much you are spending day-to-day. It can seem like a negligible expense to buy a few extra things throughout the week such as coffee or a bottle of wine or new clothes, but it all adds up. A budget will show you exactly how much you are spending and what you are buying.
• Limits overspending. Budgeting gives you the ability to plan your spending and expenses. When you have a plan in place, you can ensure you have the necessary funds available for necessities. Budgeting also reduces the temptation to buy things on impulse because you have a better idea of your financial position.
• Improves financial control. When you know how much you're spending and what you're spending it on, you can really improve your control over your money. People who budget regularly are not the ones counting down the hours until payday. They forecast their expenses and manage their money, so they always have peace of mind.
• Makes saving easier. Budgeting makes it easier to identify ways to save. You clearly see how much you're spending and how much you need to save, and by listing your expenses you can find ways to cut back and reach your financial goals.
• Financial security. Even when you start to save just small amounts of money, they add up faster than you would expect. Saving money help create a buffer that can be used to pay for any emergency expenses that may arise.

Things to avoid when planning your budget

When creating your budget planner, keep in mind the following:

• Think long-term

Budgeting is an ongoing commitment. If you find yourself repeatedly pushing expenses over to the following month, or failing to plan ahead for the cost of birthdays or Christmas, you should re-examine your budget plan.

• Set realistic expectations

There is no point planning a budget that you will never stick to. Be realistic about how much money you are going to put aside for spending, and also about how much you plan to save. The first month your budget is in place is a good barometer of how realistic it is. If you can't stick to it in the first month, then you need to revise it.

• Don’t overspend

Negative numbers in your budget are not a good thing. If you're spending more than you earn, you're putting yourself on a fast track to debt. Budgeting allows you to see if your expenses are higher than your income, so you can take action sooner rather than later.

• Make sure you save

Building up a savings amount to act as a buffer for your finances should be a high priority. Decide on a realistic savings plan and stick to it, even if this means adjusting your spending habits. If you haven’t done so already, consider setting up a tailored savings account. If you’re only saving small amounts, look for an account with no fees. If you can save larger blocks of money, consider a high-interest account instead.

• Don’t forget the small stuff

When you list all of your income and expenses you may find you have money left over. This may not always be accurate, depending on how meticulous you are with recording small purchases. Small stuff may not be obvious items such as a coffee or a magazine. Think about things such as the $2 you might have been charged for withdrawing money, or the $8 accounting fee on your bank account. These small amounts add up and need to be incorporated in your budget. When you find budget discrepancies, track them down and find the cause.

• Adjust your budget regularly

Budgets need to be regularly adjusted to match changing finances. The interest rates on your mortgage might change, your water rates or electricity charges could increase, or you might add to your credit card debt, increasing your monthly payments. Even if you reduce your credit card debt, this will result in lower monthly payments, which will again affect your budget. It's important to review your budget regularly and account for any changes, so you can stay in control of your money for the long term.