A personal monthly budget is a financial plan that outlines how you intend to spend and save your money for a month. It helps you make informed decisions about your finances and aids you in avoiding overspending or falling into debt.  

A budget plan is essential for businesses because it can allow us to plan for our financial future and make informed decisions about how to allocate resources. When you make a budget, a business of any size can set financial goals and track its progress toward achieving them. It can also help a company identify any potential problems or areas where it may be overspending, so adjustments can be made to the plan as needed. 

Having a budget is especially important for small businesses, which may have limited resources and may be more vulnerable to financial challenges. A budget can help small business owner to make the most of their available funds and ensure that they are being used in the most effective way possible. It can also help to improve the financial stability of the business and increase the chances of its long-term success. 

To create a budget, you need to first determine your income and monthly expenses. This includes everything from your rent or mortgage payment to your groceries and entertainment expenses. Once you have a clear understanding of your monthly income and expenses, you can use this information to make a plan for how much you will save, and how much you can afford to spend in each category. By sticking to your budget and reviewing it regularly, you can gain greater control over your personal finance.

What information do I need to make a budget? Create a household budget with this information

Before you start to create a budget template, there are a few things you should know: 

1. Your income: Net income includes every source of income, such as your salary, any investments or rental income, and any other sources of money that you receive on a regular basis. 
2. Your fixed expenses: The expenditure that remains the same each month, such as rent or mortgage payments, car payments, and insurance premiums. 
3. Your variable expenses: These are expenses that can fluctuate from month to month, such as groceries, entertainment, and gas for your car. 
4. Your financial goals: It’s important to have a clear understanding of your financial goals, as this will help you to determine how much you should be saving and where you can afford to cut back on expenses and take further control of your finances.
5. Details of any emergency funds: Emergency funding can be used to cover emergencies such as natural disasters, equipment failures, or legal issues can arise unexpectedly and can be costly to fix. An emergency fund can help cover these unexpected expenses without having to rely on credit or other forms of debt, helping you plan for more financial security. Don’t forget to add this, as it could help you track at a later date.

Once you have this information, you can start to make a monthly budget by listing out all of your income and expenses for the month and subtracting your expenses from your income. This will give you a clear picture of how much money you have available to save or spend. You can then use this information to make a plan for how you will allocate your money and track your progress toward achieving your financial goals. 

What is the 50/30/20 rule? 

The 50/30/20 rule is a financial guideline that suggests that you should allocate 50% of your income towards necessities, 30% towards discretionary spending, and 20% towards savings and debt repayment. The rule is based on the idea that by dividing your budget in this way, you can achieve a healthy balance between your financial obligations, your lifestyle goals, and your long-term financial stability. 

In the context of business, the 50/30/20 rule can be applied to help a company allocate its budget in a way that promotes financial stability and long-term success. For example, the “necessities” category might include expenses like rent, utilities, and payroll, while the “discretionary” category might include marketing and research and development. The “savings and debt repayment” category might include contributions to a retirement fund or payments on any business loans. 

By adhering to the 50/30/20 rule, a business can ensure that it is allocating its resources in a way that meets its immediate needs while also building a strong foundation for the future. 

Simple steps to keep track with your budgets 

Adjusting your spending to stay in line with your personal monthly budget may involve making changes to your spending habits or finding ways to increase your income. Here are a few strategies you can use: 

• Cut back on unnecessary expenses: Look for areas where you can trim your budget by cutting out unnecessary expenses or by finding cheaper alternatives. For example, you might decide to cancel a subscription service or switch to a cheaper cell phone plan. 
• Increase your income: Look for ways to increase your income, such as by asking for a raise at work, taking on additional part-time or freelance work, or starting a side hustle. 
• Prioritize your expenses: Determine which expenses are most important to you and focus your spending on those items. This could mean cutting back on less important expenses in order to free up more money for your priorities. 
• Make a plan for saving and paying off debt: Determine how much you want to save each month and make a plan for paying off any debt you may have. This could involve creating a debt repayment plan or setting up a savings account. 

By making these adjustments, you can ensure that your spending aligns with your personal monthly budget and helps you to achieve your financial goals. 

Reviewing your budget 

It’s a good idea to review your budget regularly, to keep track of your spending and ensure that you are staying on track with your expected earnings and outgoings. There is no one-size-fits-all answer to how often you should review your budget, as it will depend on your financial situation and goals. However, here are a few general guidelines based on your specific circumstance: 

• Monthly: If you are just starting to budget or if you have a lot of financial goals to track, you may want to review your budget monthly. This will allow you to see how you are doing and make any necessary adjustments. 
• Every two to three months: If you have a good handle on your budget and your financial goals, you may be able to review your budget every two to three months. This will allow you to make sure you are still on track, without having to spend too much time on budgeting. 
• Annually: If you have a stable financial situation and are not trying to track a lot of financial goals, you may be able to review your budget annually. This will allow you to make any necessary adjustments to your budget and make a plan for the year ahead. 

Ultimately, the most important thing is to find a review schedule that works for you and stick to it. This will make it easier to spot any abnormalities and fluctuations, or highlight mistakes that could be made. 

Our free, downloadable budget spreadsheet below should help you get the basics down if you’re a freelancer. By using our easy calculator, you can make a list to focus on how much you’re spending and what you’ve got left, so you know how much money is going into individual budget categories, and help you manage your money. With us, you will find it easier to track your monthly budgeting and look at your spending from a new perspective. We know money health is important, and want to help you gain a better understanding of the options available for you.

Using a budgeting tool

Our goal is to give you the best opportunity possible, so to help you stay in line with your financial health goals, below are our favorite tools to help you in budgeting your money.

1. Mint: This tool offers a comprehensive budgeting experience, with features that include budget tracking, bill reminders, and financial goal setting. It also offers personalized financial advice and investment tracking.
2. EveryDollar: This tool is created by Dave Ramsey and his team. It is a budgeting tool that is easy to use, and it is designed to help users stick to a budget by keeping their expenses organized.
3. YNAB (You Need A Budget): This tool is designed to help users gain control of their finances by creating a budget and sticking to it. It offers a 34-day free trial, and after the trial, it is $11.99 on a monthly basis or $84/year.
4. PocketGuard: This tool offers a simple, straightforward approach to budgeting, with features that include budget tracking, bill reminders, and financial goal setting. It also offers a feature that helps users see if they can afford a purchase before they make it.
5. Wally: This tool is a personal finance app that helps you track your expenses, income, and budget all in one place. It also includes a feature to track your net worth over time, so you can see how your financial situation is improving.
6. Goodbudget: This tool is an envelope budgeting system that helps you divide your income into virtual envelopes for different expenses. This helps you allocate your money to the areas that are important to you, and it makes it easy to see if you’re overspending in any area.