Planning Your Budget for the New Year

By on Apr 26, 2012 in Budgeting, General Tips

Are you already thinking about the 2014 budget?

Don’t wait until the New Year, start planning now so that you are ready next week with a plan. Others will wait and spend the entire year thinking about getting their finances together. Not us, we start mapping out the annual spending plan now.

Try a free online template or create your own spreadsheet in Excel. First list your income. If you have many sources, list each one separately. If the income varies, take an average of your earnings from last year (the year divided by 12) to come up with a reasonable monthly total.

Then multiply the monthly total by 12 and this is your annual income. This is on a separate line to be used later in our budget.

2014 Income Annual Budget Project Done Excel Worksheet 5

Next calculate your monthly fixed expenses. This would include anything that is due on a monthly basis from regular bills to recurring expenses that are charged to your credit or debit card. Total this column to come up with your monthly number. Then on the next line, multiply this total by 12 for your annual expenses.

2014 Fixed Expenses Budget Project Done Excel Worksheet 4

Then total up the miscellaneous expenses that happen each year but not necessarily every month. Things like car repair, medical expenses, family vacations, meals & entertainment, emergency fund savings, etc. Take a look at your expenses for the last 2 years to come up with your categories and annual expenses. In this section, we have some control of what is spent. If we don’t spend the money in a category, we can keep it in savings ~ so be watchful of this section and see how much extra you can save each year.

Once the annual numbers have been calculated, divide this by 12 to come up with a general monthly number for easier tracking. Setting this money aside each month will take the stress out of emergencies and not drain your bank account in its urgency.

2014 Annual Expenses Budget Project Done Excel Worksheet 3

The next part of the budget is to calculate any debt that you want or need to pay off like credit cards, loans, etc. We will set this in motion when we have our annual totals in order.

2014 Debt Budget Project Done Excel Worksheet 2

Now we are ready to total up our year and see where we are. Start with your annual income and subtract your annual fixed expenses then subtract your miscellaneous annual expenses. This is your annual savings or loss to pay off the debts/credit cards listed. Divide this number by 12 for your monthly payment amount.

2014 Annual Budget Project Done Excel Worksheet 1

If this number is negative, it is time to take a hard look at your Miscellaneous expenses and see if you can narrow these a little to get closer to a positive number. You might even need to increase your income if reductions aren’t enough. The bottom line is that we need money to pay off any outstanding debts and to have a cushion for the just in case. Just in case car repair costs more than expected. Just in case we have a serious unplanned medical expense above our projection.

The next step is to track the money on a monthly basis. You can do it weekly or monthly but by reviewing your numbers, you are always in control of your money and your money won’t rule your life!

2014 Annual Budget Monthly Tracking Project Done Excel Worksheet 6

(Click the image to see the larger view)

Print a copy of the 2014 projections, keep it with you and go over it often. Because it is with you, fine tuning is happening all the time so less money and time are wasted.

The final step would be to snowball your debt to zero and have more money in your savings. I just read the book Pocket Your Dollars by Carrie Rocha and she and her husband used a similar budgeting plan to get out of debt and they have stayed out of debt!

To snowball your debt, arrange them in balance order listing the lowest balance first. Make your monthly payments on everything but apply extra money to the lowest debt until it is at zero. Then take this money along with any extra money and start applying it to your next debt until it is zero. Repeat until your debt payments are all zero! Now this money can be aggressively put towards your emergency fund or the purchase of a house or retirement investments. The less you owe and the more you save, the more options you have! Life gets really fun at this point.

Dream big and enjoy the future. Let me know if you need any help putting your spending plan in order and stay in touch with your progress. Let’s make 2014 a big savings year!

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Have You Set Up Your 2013 Budget?

By on Apr 26, 2012 in Budgeting, General Tips

Now that we are beginning a new year with a clean slate, it is time to take an overall look at our annual budget and make changes for this year. Mapping out income and expenses one quarter (every 3 months) at a time or one year at a time, keeps more money in your pocket and gives you control over your finances.

Let this year be better organized than last year and the year that you are not living paycheck to paycheck. Get a pencil and paper or open an Excel spreadsheet and list the dates across the top of the page and make an alphabetical list of expenses in a column down the left side.  The dates should correspond with your paycheck dates (weekly, biweekly, and monthly)

Spreadsheet for Budget Project Done Blog

Once you have this set up, start filling in the bill payment amounts all the way across according to due date. Then total each column to find out your weekly expenses. Don’t forget to add in savings, fuel, groceries, haircuts, clothing, entertainment, etc. Add your weekly income under each total and subtract. If the difference is positive, use this money to pay off any outstanding debt and apply the rest to your savings and investment accounts.

If this number is negative, your expenses are more than your income and it is time to strategize. If a few due date adjustments correct the negative number and bring it to zero or give you a positive number, you are done. If not, you need to make more income or cut expenses because you spend more than you earn. Don’t worry; this can be fixed!

It is good to know now so that you can put a plan in place and set yourself up for financial success right now. Maybe a second job is in order or a job change. Maybe you could rent a room in your house to bring in more income. Also, it is never too late to renegotiate your monthly expenses. Look for better insurance rates, talk with your utility companies about a fixed monthly rate that is more affordable. Use coupons and Groupons.

Make savings your second job and always be on the lookout for a better deal. Read the weekly ads and clip coupons to keep costs down as much as possible. Retail shops want to help you save money and that is the purpose of the weekly ads and coupons. Take them up on their offer because there is no reason to pay full price unnecessarily!

Or after you have created your budget on paper, do what Ramit Sethi does and have your bills automatically deducted from your account so that you don’t have to remember due dates. He makes his budget happen automatically and just spends about an hour or less each month reviewing his progress.

Whatever you decide, good luck and keep me posted. I am here to offer advice and support!

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Reviewing the Budget

By on Apr 26, 2012 in Budgeting, General Tips

Setting up a budget is one way to grow wealth. Budgeting helps us track our expenses so that we know where our money is going. Some of our expenses are legitimate – the mortgage, utilities, insurance, groceries, fuel, etc. When we take the time to investigate our spending habits, we usually find that we spend more money than we thought on frivolous items.

I am not saying that we can’t have fun money in the budget. I am saying that if we are smart, we have money for fun but plenty of money in our savings accounts. Hopefully we have more than one savings account. I would have an emergency fund, a retirement fund, a vacation fund, and a mad money fund for everything frivolous that we must have to stay motivated and keep up the hard work. The mad money fund can also be in cash so that when it is gone, that is it until the next funding cycle.

(Click the image to view it larger)

To set up the initial budget, we have to track the expenses. Set up a few columns for income and the necessary expense categories. If you are on a fixed income, you know what you are making each month. Write the income in one column. If you are self-employed, you can do an average of the last 6 months or write in the amount that you know you must make each month to live. On the high months, put the extra money away for the low months so that in the low months, your budget is not short.

If you use a software program, like Quickbooks,, or Excel, run the P&L report by month to total the expenses and recurring debit categories. If you do not use software for tracking, get your last 3 bank statements and a highlighter and start marking it up. Then use a calculator to total up each category.

This will need to be done on the business level as well if you are self-employed.

One major category to watch is the Misc/Fun category. This column is for all unnecessary expenses like dinner out, clothes, movies, Starbucks, etc. Again, I am not saying that we should not have fun in our budget, at this point we are narrowing down our essential living expenses so that we can make room for everything else. There is usually a lot of money floating in this category that could be better used in the emergency fund or the retirement fund.

Once you have your numbers, review them and see where you can improve or save. If you aren’t bringing in enough money to cover your basic living expenses, then your Misc/Fun category should be near zero until you find work that pays better.

A few simple improvements can sometimes make all the difference between overspending and saving. If the grocery category seems high, use coupons. If your Misc/Fun category seems high, take advantage of Groupons and online coupons to cut these costs in 1/2.! If your cell phone, cable or health insurance costs seem high, make a phone call and see if your provider can do better. There are plenty of discounts offered to new customers that existing customers can take advantage of as well if we ask.

We need to live our budget today, review our habits weekly and revisit the budget every quarter for necessary fine tuning. Budgeting and tracking today will set up our future. When we have money to live, invest, and play, we are on the right path. In the beginning days of budgeting or if our income isn’t where it should be, we need to be very vigilant with our money. When we have put in the time, the budget will improve and we can ease up a bit and not have our budget be overwhelmed by a $4.00 coffee or a $20 pair of shoes! Let the budget work for you to eliminate the stress of overdraft fees for good. You will also find that you eliminate debt and improve your credit score for even more savings!



I am here to help and answer any questions that you have. You can subscribe to my blog for future information or send me a message on my Facebook page at which I will gladly answer.

Take Over The Bill Paying Chore

By on Apr 26, 2012 in Budgeting, General Tips

If you are a household where one person is in charge of budgeting and paying all of the bills and that person isn’t you, today would be a good time to make a change. It is never a good idea to be in the dark when it comes to your finances. What if something happens to the one in control of the money? What would you do first?

That would be worse case scenario but having a plan and the knowledge that comes with a budget, would go a long way towards your family’s security. If you like being in the dark because the idea of knowing how much money is going out vs. coming in, you are not alone. The budget can be a scary and daunting task. Why not get involved now to gain the knowledge that you need to protect your future.

If the person in your household loves the job of handling the money and doesn’t want to give it up or if you do not have any real sense of how to make a budget work, then I would recommend that you sit down with your partner on a regular basis to determine what you have, where it is, what you owe, and when it is due. Know where all of the paperwork is kept. Know the balances of your bank accounts. Discuss future plans for vacation, retirement, college funds, etc.

You might find out that the person in charge of the money at your house is only doing it out of obligation to you. They might hate shouldering the burden all alone. They might be doing a good job but a team always functions better than an individual. Find out if you are financially secure or if you need to roll up your sleeves and get to work.

Sharing ideas and goals can go a long way to making your dreams a reality. If this is your first time openly discussing money, you might feel a little awkward but the sooner you do it and the more committed you are to it, the easier and more natural it will become because it is an ongoing conversation. Stay committed to being part of the solution so that you are not part of the problem.

Our kids need to have a firm grasp on handling finances and if both parents are able to discuss this topic reasonably and calmly, our kids will greatly benefit. Money conversations and spending styles are different from person to person. Knowing how to work through these different styles can create a stronger family unit. A world full of people who can discuss their finances, owning their victories and mistakes, is more enjoyable and less stressful!


I am here to help and answer any questions that you have. You can subscribe to my blog for future information or send me a message on my Facebook page at which I will gladly answer.