1.4 Budgeting Preparation


Lesson Objective: Prepare everything you will need before you build your own budget


What You'll Need

  1. A notebook to record your financial goals and/or transactions
  2. A box or somewhere you can store all of your receipts

Estimate Your Income & Expenses

First, list out all of your reliable income sources. A reliable source is any source that provides you money regularly and consistently. Once you have your list, put a monthly dollar amount on each source.

Next, list out all of your essential expenses and give them a monthly dollar amount. Essentials include things like:

  • rent
  • utilities
  • groceries
  • toiletries
  • necessities that help you earn money (i.e. transportation cost to get to work)
  • healthcare
  • emergency savings

Then, list out all of your outstanding debts and assign them the monthly minimum payment amount. When you've done this you should have something similar to the tables below.


Income Monthy Budgeted Amount
Job 1 500
Job 2 1000

Expenses (including debt)

Expenses Monthy Budgeted Amount
Rent 500
Groceries 200
Electricity 50
Water & Sewage 50
Toiletries 50
Auto loan 150
Other expenses $$$

Now we can check to see how much we have left over to budget for other things.

Income - Expenses = Balance
1500 - 500 - 200 - 50 - 50 - 50 - 150 = $500
left over to put toward other things

The other things that you budget for are entirely up to you. You can put more money toward loans or even start saving for a vacation. I don't offer financial advice but there's some helpful information in this Reddit personal finance topic below. Use at your own discretion.

The Tool

I designed an Excel spreadsheet that makes the budgeting process easier for you and gives you more control over the financial details. In the next section, you will use all of the work you've done so far to build your own budget. If you've taken the steps above, entering the information into the template should be no trouble at all.

Budget Templates

Download the Excel files below before moving on to the next lesson. The "Demo Template" file contains the sample data that is shown in each video tutorial in Section 3. The "Blank Template" file is empty so that you can start making your budget from a clean slate. There are no macros in these files, so they don't run executable codes on your computer.