Finances – Personal Budget


Visual Accounts

Before you can dream of success you must make sure you have a plan for your finances. This plan is called a Budget.

Unlock your financesThere is one step you need to make before you can create a budget, you need to know what you are spending your money on and, if necessary, how to get your finances on to a secure footing.

Yeah, I know, boring but essential. Sometimes you have to take the rough with the smooth.

Where’s my Money Going?

On a piece of paper write down everything you spend your money on. Don’t miss anything out no matter how small. For example:

  • Housing Expenses (Rent/Mortgage, Insurance etc.)
  • Taxes
  • Gas/Electricity
  • Telephone
  • Internet
  • Mobile Phone(s)
  • Satellite/Cable subscription
  • Credit Card Repayments (itemise everything on a separate sheet)
  • Loan Repayments (itemise everything on a separate sheet)
  • Grocery shopping (itemise everything on a separate sheet)
  • Lottery tickets
  • Lunch at work
  • Starbucks coffee
  • Night out (Bar, restaurant, pub etc.)
  • Car expenses (itemise everything on a separate sheet)
  • Public Transport/Taxis
  • Clothing
  • Tobacco
  • Pocket money
  • Schooling costs (itemise everything on a separate sheet)

It might take you a while to complete this list. So add to it as you remember things. It doesn’t have to be in order, yet. With your itemised grocery list and other lists this may run to a number sheets of paper.

Once finished, go through the lists and highlight everything that is absolutely essential like Rent, Taxes, Gas/Electricity, Credit repayments etc. and ignore the rest (note food isn’t on my list). On a new sheet of paper write these essential items in order of priority (highest to lowest).

If you’re having problems with your finances, you’re behind with payments etc. please look at Sorting my Finances before continuing.

Now go through the rest of the items and list them in order of priority removing any that you don’t need or can do without for a while. Having fun is essential so don’t remove all your leisure activities. Now consolidate items from the separate sheets under a single heading like “Food & Household Expenses”, “Car Expenses”, “Schooling Expenses” etc.

Putting it on Paper

OK, we now have a full list of the things you spend your money on. We can now create a basic budget for your expenses. If you have Excel or OpenOffice (which is free) you should use that. If not, no matter, you can use a (large) piece of paper.

To start you will need to create a table with 27 columns and as many rows as you have items on your list (plus two extra rows). You can download this template for both Excel and OpenOffice which you can customise.

The headings for each column are:

Item, Month 1 Budget, Month 1 Actual, …., Month 12 Budget, Month 12 Actual, Budget Total, Actual Total.

You can change Month 1 etc. for month names if you wish so it reads “May Budget” etc.

Now put one item from your list in each row starting with the highest priority item. The final row is Total as well. Calculate how much you spend on each item per month, enter it under the “Month x Budget” column for each month. Calculate the Totals for each Budget column and row.

Congratulations! You’ve just created an Expenses Budget.

We’re nearly finished. You now need to add your income to this Budget and, finally,  a “Contingency” row.

Go through all your Salary slips from the last 12 months and total the NET amount from each month. The NET amount is the amount you receive in your hand (cash or cheque) or is paid into your bank account. Just for reference, the GROSS amount is the amount before any deductions, the NET amount is the amount after all deductions (Taxes, Social Security Payments, Pension Payments, Garnishees etc.)

Now create a row under your Totals row and call it “Income”. Under each Budget column enter the monthly amount you have just calculated. Now below that add another row named “Balance”. In the “Balance” row subtract the Income from the Total. You must have a positive amount. If it is negative, you will need to look at your monthly expenses and see what you can do without or buy cheaper. Please look at Sorting my Finances if you need help with this.

The last part is the “Contingency”. This is the positive amount from “Balance”. Put this amount every month into a deposit account. This is for months when you don’t receive much Pay or when there are unexpected expenses like heating repairs etc. It is not to be thought of as “My Money”. It isn’t, yet. It’s for emergencies only.

Technically, you should put 20% of your NET pay into “Contingency” and, at the end of each year, invest the balance in a higher yield, secure savings scheme. You’re probably not in a position to do that yet but, you will be soon.

Now comes the hard part: Sticking to your Budget.

FinancesAt the end of every month total up all your expenses for each category and put them in the “Actual” column for the month. Put your NET pay into “Income” and calculate the “Balance”. Any money in “Balance” must be placed into your deposit account.

If the “Balance” is negative find out why and fix the problem. If it is because you’ve spent too much, alter your spending habits. If it is because you’ve received less pay, try to increase your earnings. Also, remember you can use the “Contingency” money if it is an emergency. Never rely on your “Contingency”, alway fix the problem.

Remember, using Visual Accounts makes sticking to a budget so much easier.


I want to help you so, if you have any questions about Creating a Personal Budget, please leave them below.

Visual Accounts


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