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Budget Building 101

An introductory course on building a budget in Google Sheets. You can modify the included template for your own budget, try to avoid changing the calculations in some of the cells.

The template assumes a monthly income of $4092 based on a pretax salary of $70,000. The income does not take into account the 2 months you get 3 paychecks (26 paychecks in a 52 week year).

If you want to include the two extra checks in your choice making, simply take your salary after tax and divide it by 12. Figuring tax is annoying but you can figure it from your paycheck by taking your hourly earnings * hours and subtracting what you were actually paid. This is approximately your tax rate, but is not fully accurate. It also includes certain things your company gives you that are considered 'income', like a life insurance policy with them as the beneficiary that you pay for. That's late stage capitalism!

Template

Click the link to view the template. Make yourself a copy of this sheet and work from your copy.

https://docs.google.com/spreadsheets/d/1YHzrjfVjtNEITDNScakGoeyWAFbc789iKEZDwCndXn0/edit?usp=sharing

Incomplete How To

You can adjust this document to fit your needs, mostly adding new lines and deleting items you do not need. Make sure to copy and paste the calculations that go on each line.

  1. Make yourself a copy of the google sheet template listed in the Template section.
  2. Add your income
    • Multiply your BIWEEKLY paycheck by 2 and put it in the monthly income box.
  3. Add your expenses
    • Use your debit card and credit card records
    • Review your checking account
    • Save receipts and enter them into the Transaction Log Optional to calculate unknown spends.
    • Your expenses might be fixed or variable. If it changes, just do your best.
    • Be as accurate as your decisions need you to be.
  4. Review and keep adding expenses (forever)
    • The budget is a living document you should review regularly as a habit.
    • I review my budget when I get paid or before I consider a medium to large purchase.

Budget Categories

I used some categories in the spreadsheet:

  1. Core Budget Spend
    • rent, electric, internet, water, phone, prescriptions, transit to work
  2. Debt Spend
    • Student loans, credit cards, QUANTIFY IT
  3. Savings Spend
    • Save a little, you will need it
    • Helps in employment negotiations too... you can afford to say no to a bad offer...
  4. Hygeine Spend
    • Gotta brush those teeth
  5. Subscriptions Spend
    • Netflix, Hulu, Spotify, New York Times, etc.
  6. Nonessential Spend
    • Fun, uber/lyft, transit to fun, nail salon, etc.
    • Some things listed above can have an essential component
    • What if you have to uber to work because you would be late? goes in essential spend as a seperate uber line item than 'fun and nonessential'
  7. De-Annualized Spend
    • Annual or non-monthly events - flights home, non-routine dr visits.
  8. Donations Spend
    • Noisebridge, EFF, etc.

Making Spending Judgments

If something is a high percent of my income, I try to bring it down. There are different strategies for everything, it usually just comes down to two things:

  1. Adjust your habits
    • Eating a $12 lunch at work every day costs $3120 per year - pack your lunch - or quit... just kidding
    • Find more things like this, especially daily or weekly habits that cost you.
  2. Shop Around
    • Stop buying books and games and instead make a list of what you already have, read the top priority on that

Transaction Log

You can play around with this.

It also helps to have different transaction logs for different categories.

Don't let perfect be the enemy of good, it is hard to capture everything, be approximate where necessary, get precise if it is a big part of your budget.

I recommend doing it for at least a few months by saving every single receipt. It will help you capture more interesting budget line items that you use every day like 'deoderant', 'toothpaste', 'dish soap'.

As you start to track your spend, you might find more reasons to buy things in bulk as your finances allow, as the savings will be more apparent. No more 4 ounce bottles of dish soap at the bodega.