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Making a budget isn't exactly the most exciting way to spend your day, but it's near impossible to grow your savings without one. From essentials like groceries to little luxuries like a trip away, it's easy to drain your wallet if you're not paying attention to your spending. But here's one powerful way to spend while still managing to save – by creating a simple budget template.
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What is a budget template?
A budget template is a personal finance tool that allows you to monitor both your incoming cash and your outgoing spending to help you spend within your set limits, thus helping you to save. You can create a traditional budget by drawing it up in a journal or on a spreadsheet, or you can use the budget templating tools provided by a money management app.
The Finder app, for example, is a great way to manage your money. By centralising your bank accounts, active loans, investments and credit cards on a single dashboard, the Finder app helps you monitor your money 24/7. This means you are in complete control of your finances. Besides this, you can get a better understanding of your financials by using the app to monitor your living expenses and credit score – all for free.
How to make your simple budget template work
#1 Work with something you can understand
The main reason that people have a budget template is so that they can better understand their personal finances. It would therefore not be wise to choose a budgeting template that confuses you with a messy interface or complex numbers. Work with a system that you understand and keep the numbers simple.
If you hate working with numbers manually, you may want to consider an online platform or app to help you monitor your money. Remember to go with a program that has an intuitive interface, essential monitoring tools and security features to keep your personal financial information safe.
#2 Categorise your inflow and outflow
If you're creating a simple budget template manually, set aside a good chunk of your day to work through the numbers. This will give you ample time to carefully look at your ingoings and outgoings and avoid any careless mistakes.
Start by grouping your numbers into cash inflow and outflow on a monthly basis. For example, your salary counts as an inflow and your monthly utility bills count as an outflow. You can then break these categories down even further into groups such as bills, shopping and entertainment.
Once you've categorised these numbers, you should set a savings target. This will give you an idea of how much inflow should be left once your essential outflows have been covered.
#3 Automate your savings
Automating your savings means you have one less task for you to worry about each month. You can do this by automatically moving the desired portion of your income into your savings account the minute your salary comes in. This reduces your likelihood of overspending and eating into your savings throughout the month.
Before automating your savings, use your simple budget template to decide on the portion of your income that you'd like to save. Some people like the 50/30/20 rule, where 50% of your income goes to your needs, 30% goes to your wants and 20% goes to your savings. Others prefer the 80/20 technique, where 80% of your income goes to general expenses and 20% goes to savings.
Choose an allocation that you're comfortable with and factor it into your simple budget template. Then simply set up a direct debit into your savings account each month.
#4 Plan for your bills
Bills are an expected expense that you'll encounter every month. Instead of scrambling on your repayments, plan for these expenses in advance. Using your simple budgeting template, allocate a set portion of your income to essential bill payments. These include utility bills, rent payments, loan repayments and your child's education fees. In fact, you may wish to create a bank account to hold cash specifically for your bill repayments.
Once your salary comes through for the month, you can automatically debit a set portion to your bill repayment fund. This works the same way as automated savings. By setting aside cash to pay off bills, you're more likely to cover these expenses on time instead of accidentally using this money for non-essential costs.
#5 Track your savings
As you start spending and saving according to your simple budget template, you should track your savings on a monthly basis. This will help you understand if the allocations you decided on work, and how to tweak them to better suit your spending habits.
Remember, your personal finances are constantly changing. Tracking these changes by monitoring your savings will help you customise your simple budget template to bring you closer to your savings goals.
Your free budgeting template
If you want to get started right away, here's a ready to use template.
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