Create Your Perfect Budget With This Worksheet

Use this budget worksheet to see where your money's going.

With a budget planner, you can breeze through bill payments without breaking a sweat and gain control of your finances knowing where your money is going and how much you need to cover your expenses. Budgeting helps you become more aware of your income and spending, so you can make sure you’re spending in a way that supports your financial goals instead of wondering where your money went at the end of the month. If you’ve never budgeted before — or you haven’t done it for a while — follow this guide.

How to Create a Budget

Here are the major steps to create your budget:

  1. Identify and calculate your fixed expenses.
  2. Track spending on variable expenses.
  3. Build your savings.
  4. Eliminate debt.

First, learn the details of how to make a monthly budget that fits within your net income, then use this budgeting worksheet to start tracking your money.

Fixed Expenses

When it comes to budgeting, there are two categories of expenses: fixed and variable. Fixed expenses don’t change from month to month and are non-negotiable. This category includes the absolute necessities — such as housing, health insurance and transportation — and often comprise the largest portion of your budget.

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The most important part of your monthly budget is the money you spend on housing. Whether it’s the cost of your rent or mortgage, housing is likely your biggest monthly expense. Research from the Bureau of Labor Statistics found that Americans spend an average of $17,000 to $18,000 on housing per year, which works out to between $1,417 and $1,500 monthly.

If you own your home, you should also include the cost of your property tax when budgeting for housing costs.

Health Insurance

Staying healthy isn’t free, so you should include the cost of healthcare in your budget planner. Healthcare costs include your health insurance premiums if you’re not covered through work — or if you’re topping up your coverage using private market insurance — as well as costs for healthcare not covered by insurance and any money you spend on co-pays and deductibles.

How much you spend on healthcare depends on your age, whether you’re taking prescription medication and the cost of your insurance premiums. On average, those ages 65 to 74 spend the most — $5,956 annually, or more than $496 monthly, according to the BLS. People ages 55 to 64 years old aren’t far behind, spending an average of $4,958 annually, which is about $413 per month.

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Unless you’re among the lucky few who can bike or walk everywhere you need to go, budgeting for transportation is nearly as essential as budgeting for housing. Depending on your living situation, transportation costs might include a monthly metro pass, car payment, fuel or vehicle leasing costs.

When budgeting for transportation, keep in mind that some components of this category are considered fixed, like car payments, whereas others vary, like gas. Overall, transportation costs Americans an average of about $9,000 each year, the equivalent of $750 each month.

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Variable Expenses

Unlike fixed expenses, the variable components of your budget will change from month to month depending on your lifestyle. Some variable expenses are absolutely necessary, such as food costs, whereas others count as discretionary spending, like entertainment. Creating a budget will keep you from overspending on discretionary expenses so that you have enough money for necessities.

Food and Groceries

No spending tracker is complete without a category for food costs. Accounting for groceries is a pivotal part of the budgeting process, and it should also include take-out and restaurant visits. Don’t forget about those food expenses that slip by you — like that latte you paid for in cash; they can work out to a sizable amount of spending over the course of a year.

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Gen Xers and early baby boomers spend the most on food on average, according to the BLS — likely due to having larger household family sizes than millennials. People age 35 to 54 years spend more than $8,000 annually on food, which works out to an average of $667 monthly.

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Though some utilities — like your phone, internet and cable bill — are fixed, many shift from month to month depending on the season. Gas and electric bills, for instance, will fluctuate as you crank your air conditioner in the summer or heater in the winter. Other utilities costs to consider include water and trash services. The BLS reported that utilities cost Americans an average of almost $4,000 per year or $333 monthly.

Entertainment and Other Extras

Living on a budget doesn’t mean you’re not allowed to enjoy yourself, so include entertainment expenses in your budget template so you can maintain balanced spending habits. The average American’s entertainment expenditures are about $2,700 each year, which works out to $225 per month. Your discretionary expenses can include movies, amusement parks, concerts or other activities you spend money on purely for enjoyment.

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Other expenses that will likely work their way into your budget include personal care expenses, like hair care and clothing. On average, clothing and personal care supplies cost $2,430 each year, just north of $200 a month. Although you might not spend the same amount each month, setting aside a personal care allowance ensures that you’ll have the funds you need when you do go to make a purchase.

You should also make room in your budget for fitness, even if it’s a discount gym membership because staying healthy can save you money over time.

Building Savings and Eliminating Debt

One of the biggest benefits of money management is gaining overall financial health because you’re planning your spending to align with your financial goals. With that in mind, saving for the future to become financially secure is key for any budget.

In terms of retirement, start setting goals and saving as soon as you can. Online investment company Fidelity, for example, advises that you have 10 times your annual income saved by the time you hit retirement age — however, more than half of Americans will retire broke. The easiest way to put money away is to contribute to a 401k or individual retirement account. In your monthly budget, deduct this money from your monthly income right away so that you don’t think twice about spending that cash instead. Consider automating your savings as part of your plan to build better money habits.

Finally, you need to budget for debt reduction and eventual debt elimination. The vast majority of Americans have a mortgage loan, student debt, credit card debt or all three. Just like you do for retirement saving, set aside a percentage of your income as soon as you get your paycheck to put toward eliminating any debt you might have. This same strategy can help you create an emergency fund in addition to your retirement savings that will act as a safety net should you encounter illness, job loss or any other financial crisis.

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About the Author

Sylvie Tremblay

Sylvie Tremblay is an Ontario, Canada-based writer specializing in medical, health pet care and lifestyle topics. Since starting her writing business in 2010, she's worked with, the Houston Chronicle, the Arizona Republic, mindbodygreen and Healthy Directions Magazine.

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