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Money Planning Series: #3 Rundown of Our Provided Budget Template Excel File

Happy Wednesday! This is the third post in my money planning series. The first post covered our budget tracking system. The second post discussed how we integrate Mint into this system. Today’s post combines the two to some degree. I’ll start by sharing the budget template I created that models our budget tracking system.

The first thing my husband and I did when we set up this document was determine how much we wanted to have in each virtual envelope (Column B). These were definitely goal amounts in the beginning (like making sure we have a fully-funding emergency fund). It gave us goals though and helped frame our conversations about money and our priorities.

I also needed these goal amounts because I wanted to know when we should stop filling some of these envelopes. If we put a set amount of our income into our health: medical/dental virtual envelope each month, I wanted to know when it’s full and can stop putting money in there.

Next, we had to set up a plan to get to these goals without surpassing our income. We accomplished this by documenting how much we wanted to spend or save each month within each virtual envelope (Column F). This was best guess, wish list level planning at this point. (For instance, if we want to go on vacation next year to Disney World, it’s going to cost about X. There are eight months left so X/8 is how much we need to save per month.)

Next, we wanted to compare our spending and savings plan with our monthly income. Luckily for us, my husband and I are both salaried, so we have set and regular paychecks, which is our only income. However, since we are paid every two weeks, most months we receive two paychecks each and some months we earn three. I wanted to look at our budget with and without those “extra” monthly paychecks. Once we entered our take home pay per paycheck into the budget (Column H), our planned monthly payments were subtracted from our monthly incomes and we saw how much was left over or overspent.

Armed with this information, we revisited our monthly payments (Column F) and made adjustments. We decided which expenses to eliminate or reduce or discussed how we could raise our income. When we’re saving for something in particular, like a new home project we’re planning, then we may decide to cut back or temporarily stop funding some virtual envelopes (like vacations or our fun money).

Personally, I like to plan to live off 24 paychecks from each of us per year so the two extra are surprise money we can drop into any virtual envelope we want, often more dinners out, paying down debt, or gifts/charity. So, at this point in the budgeting process, I’m making sure every dollar of our monthly income is allocated to one of our virtual envelopes (Cell H17).

The first time we used the Excel budget tracking document, we had to determine how much money to put in each virtual envelope to start. We could only put money in these virtual envelopes if we had actual cash or money in the bank for them. To figure this out, we documented how money we had (Cells B42-B51) and how much money we owed (Cells C42-C50). Whatever was leftover was free to put into any virtual envelope we pleased (summed in Cell C51). Some envelopes were easy to determine. We knew our cell phone bill would be X, so we better have X in that envelope for the month. Others were more variable, like groceries or restaurant spending. (Over time we’ve used Mint’s trends feature to see how much we spend in these categories to set better targets.)

Once our virtual envelopes were filled, we double checked to ensure everything balanced out. Every month, the money we have (Cells B42-B51) has to equal the money we owe others (Cells C42-C50) plus what we owe ourselves/what’s in our virtual envelopes (Cell C51). Mint tracks how much money is in each account, so I can easily grab numbers for the spreadsheet here. If the money we have doesn’t equal what we owe others and ourselves, then the amount in each virtual envelope has to be adjusted.

So, at this point, we have goals (Column B), a plan for monthly payments (Column F), and a way to track that the amount we have doesn’t exceed the amount we other others and ourselves (Row 53). Now we’re in execution and maintenance mode. Each month we track what’s coming in and out of each virtual envelope and how we’re tracking against our goals.

Some months will have no expenses but have a monthly payment plan. In those cases, you can decide what to do with this “found” money. For instance, some months our pet expenses are $0. We are well stocked on her food and meds and there are no vet appointments. However, every month we plan to spend $67 on her care. In this case, we keep that $67 in her virtual envelope until we get to the envelope cap. This covers us when her $350 vet bills come around. Once we meet the envelope cap, the extra money goes wherever we want (typically other virtual envelopes that overran or savings categories).

And, the best part is, when I know there’s money in the budget for it, I won’t hesitate to spend it according to our plan. I can enjoy an extra night of takeout when I don’t want to cook or splurging on a gift for someone. And I feel mighty proud of us when we meet a savings goal or pay off a major debt, even if no one else ever hears about it. As Hannibal often said on The A-Team TV show and is captured in my budget template, “I love it when a plan comes together.”

Photo by Sharon McCutcheon on Unsplash

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