I’m on a budget. I don’t have an unlimited amount of money to spend each week so I’ve learned that if I don’t plan ahead, my money gets spent where it shouldn’t and I can’t pay for things I should.
In an effort to plan ahead and set aside money for things I need, I came up with this Budget Allocation Worksheet. I don’t like it because it keeps me from spending mindlessly (which is how I like to spend) but it’s a necessary evil to keep me out of trouble.
Here’s how I use it:
1. We’re self-employed so I have our finances set up for a weekly allowance which covers all household spending. I mean ALL. It covers groceries, gasoline, entertainment, eating out, vet visits for the pets, doctor visits, repairs, etc. I make the transfer to the personal account on Saturdays so I have my worksheet filled in with the dates of three months of Saturdays.
2. Use pencil because you’ll be making changes.
3. This form is a little tricky to print because it’s horizontal. So I print it once, put the paper back in, and print another copy on the other end. You’ll have to experiment with your printer to see how to feed the paper or you can just print one per page.
4. Record the amounts you expect to have available to spend on household items. I suggest filling in just one month at a time.
5. Then start plugging in the amounts you expect to spend on normal things like gasoline, groceries, eating out, etc. Again, I would only do one month at a time.
6. Plug in any expenses you have occasionally, like haircuts, specific entertainment expenses (like concert tickets, for example), doctor co-pays, medicine refills, gifts, etc.
7. Now it gets a little more complicated because we’re dealing with bigger ticket items like repairs, large purchases, bigger gifts, conferences, trips. I can’t usually just go out and pay for these items – I need to plan ahead. So I figure out when I need the money to be available and how much I need. Then I divide it into smaller amounts and work backwards on the chart so I set aside a little bit each week. For example, let’s say I’m going to a conference in the fall and the fee of $300 is due by the end of June. I have 5 weeks in June and 4 weeks in May. That’s about $35 a week. So I’ll record $35 a week during May and June. By the end of June, I’ll have the money set aside without busting my budget.
Or I need to pay for a car repair. The speedometer on my Jeep works sometimes and sometimes it doesn’t. I know it will cost approximately $250. So I decide to set aside $20 a week. I write $20 in each column until I have the money. Then I schedule the repair.
8. Add up the expenses and subtract them from the expected income. If you have a balance, it doesn’t mean it’s extra – it just means it isn’t allocated to a specific item yet. Things change quickly so before that week arrives you’ll probably have a purpose for that money. It can also cover overages on items like groceries or gasoline. And there are always unexpected surprises you need money for. It’s nice to have a little extra for when those come up as they always do.
And that’s it. It’s simple and effective. And it prevents unpleasant surprises that derail the budget. So print one out and give it a try. And let me know what you think.
Download a Budget Allocation Worksheet for