Creating an itemized budget is necessary for maintaining the stability and growth of your finances. Whether you are a business manager, grant writer or private individual, budgeting expenses and planning accordingly may save you substantial amounts of money due to elimination of excess spending. As a task that can be performed both by hand and electronically, creating an itemized budget is a wise investment for anyone seeking financial accountability.
Step 1
Decide whether you will create the budget free hand or with the aid of a software program, such as Microsoft Excel. Below you will find a link to free monthly and yearly budgeting spreadsheet downloads for Excel.
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Step 2
Create three spreadsheets, with the first one being an itemized list of necessary expenditures. The second list should include optional yet important expenses, while the last should detail desired extras. Use a separate spreadsheet template for each and accurately input the name (description) and budgeted expense of each expenditure.
Step 3
Add up the total costs from each spreadsheet and compare them to your total estimated and/or allotted funds for the stated period of time (monthly, annually). If you use the Excel spreadsheet templates you'll be able to immediately track your actual daily expenditures and compare them to your estimated budget (the spreadsheet will automatically calculate your debt or surplus for each expenditure). If you are significantly over budget, first begin by cutting back on your desired extra expenses and go from there in the order of necessity.
Step 4
If you are under budget, avoid adding items to any of your lists before considering whether the extra spending will be beneficial in the long run. For example, if a non-profit manager finds that his grant money more than covers the cost of funding programs, it would be wise for him or her to allot the extra money for future unseen hardships rather than spend more on desired extras.
Step 5
Allow for miscellaneous expenses that may not arise monthly and/or annually. This provides a bit of flexibility in your accounting and may save you from coming up short despite your earlier efforts. A common example for an individual is the event of a broken vehicle resulting in the loss of both earned and potential income.
Tip
The more specific your budget is, the easier it will be for you to pinpoint and then eliminate frivolous spending. Being honest about your needs vs. wants may save you a significant amount of money over time, eventually allowing you to invest in more substantial ventures.
Warning
If your expenses are vastly outweighing your allotted budget, seeking the help of a personal finance manager may help you from sinking in the weight of your debts.
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