A budget planner is a tool, such as a worksheet or template, that you can use to design your budget. A successful budget planner helps you decide how to best spend your money while setting aside some for savings and avoiding or reducing debt.
NerdWallet’s budget template incorporates the 50/30/20 rule, which suggests that 50% of your income goes toward needs, 30% toward wants and 20% toward savings and debt repayment.
Before making your budget, gather this information
Before you get started with our free budget spreadsheet below, you’ll need some key financial information, including:
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Your take-home pay, or your monthly income after taxes. A pay stub will likely be the easiest place to find this information.
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Your fixed expenses. These are things such as housing and utility payments, insurance premiums, debt or loan amounts, child care costs, memberships and other bills that stay the same each month. Check account statements to find recurring charges and their amounts.
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Your variable costs. These are expenses that change every month, including groceries, gas costs, shopping, dining out, travel and entertainment. You can look back at past transactions to estimate your spending in these categories.
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Your debts, including interest. Be sure to include credit card debt, medical debt and other kinds of debt in your monthly budget.
Having all of this information ready will make calculating your budget much smoother and more accurate.
NerdWallet budget template
Ways to budget using other tools and systems
While ideally budgeters would work up to contributing more than 10% to savings, that’s just not feasible for some. The 60/30/10 framework may work well for those with lower incomes, living in higher cost-of-living areas, or those who need to prioritize essentials over savings.
For example: Say your monthly take-home pay is $3,000. With the 60/30/10 budget, you would devote $1,800 to needs, $900 to wants and $300 toward savings. (That’s as opposed to the 50/30/20 breakdown: $1,500 for needs, $900 for wants and $600 for savings.)
For example: You would make a plan for every bit of that $3,000, allocating specific amounts to housing, groceries, debt payments, savings and so on. If you have $200 left unassigned after covering essentials, you’d give that money a purpose, too — perhaps by putting it toward entertainment or dining out.
This system is similar to the zero-based budget. But while the zero-based budget works best for planners, the envelope system may be effective for impulse spenders who want to control how much they spend.
For example: For your $3,000, you would literally (or virtually) put a certain amount of money in envelopes that are assigned to various categories. Say there was $100 in your dining out envelope, and you’ve already spent $90. Since there’s only $10 left in your envelope, you would know to skip the dinner plans.
Pay-yourself-first budget
For example: The first thing you do with that $3,000 is stash $300 for your IRA and $100 for your emergency fund. As for the rest, you would budget as you wish but likely wouldn’t be as meticulous as with the zero-based or envelope systems.
Remember that the best budget is one that works for you. Take time to tweak your approach and adjust your spending as needed until you reach your ideal budget.
If you can’t make that budget a reality, or if you’re struggling to get a handle on your finances, budgeting might not be enough for you. Explore other options, such as seeking expert financial advice or resources that can help you pay bills.
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