Tips for Using a Budget Sheet
Before you begin, prepare a list of financial goals you are working on. These goals can be big or small, short or long term, such as:
- Building an emergency fund
- Buying a new car
- Saving for a down payment on a house
- Splurging on a vacation
- Covering wedding or honeymoon expenses
- Saving for retirement
- Establishing an education fund for yourself or your children
- Paying off student loans
Once you know your goals, determine how much you want to save for each one. Then decide on a deadline by which you want to achieve this savings amount.
This deadline will help you calculate how much you need to save aggressively. Divide your goal by the number of months until the deadline to determine the amount you should save each month.
For example, if you want to save $12,000 for a wedding in one year:
$12,000 goal / 12 months = $1,000 per month in savings
Complete the tables below, add your totals, and compare that with the amount you can save. You can get this number by filling out the income and necessities sheet and the optional spending sheet.
At the end of the month, write down how much you have saved so you can compare it with your goals. Depending on whether you saved more or less than intended, you can adjust the savings amount for the following month up or down.
Immediate Goals and Emergencies
Immediate goals and emergencies are savings you may need at any time. They are the savings you rely on when life emergencies happen, and should be your top priority when saving.
| Monthly Goal | Actual Amount |
|---|---|
| Car repair and maintenance | |
| Home repair and maintenance | |
| Illness or accident | |
| In case of job loss | |
| Extra cushion | |
| Total |
Note: You should have three to six months of living expenses saved in case you lose your job.
Medium-Term Goals
These goals are not emergencies and can be either optional spending or life goals you wish to achieve. Most will fall within a timeframe of one year to ten years.
| Monthly Goal | Actual Amount |
|---|---|
| Wedding | |
| Buying a car | |
| Traveling | |
| Education | |
| Home renovation | |
| Down payment | |
| Holiday gifts | |
| Paying off student loans | |
| Other | |
| Total |
Note: Your goals will change as your life changes. Reassess your medium-term goals every year to ensure that you are planning your future spending carefully.
Long-Term Goals
It can be easy to lose sight of long-term goals when you have more urgent savings priorities. However, they are often the most costly, and starting to save early can help you benefit from compound interest to save more easily.
| Monthly Goal | Actual Amount |
|---|---|
| Retirement | |
| Buying a second home | |
| Saving for college education | |
| Other | |
| Total |
Note: For some individuals, these goals may have a shorter timeframe, for instance, if you plan to retire in a decade. Adjust these goals to the medium-term category as necessary.
Next Steps
If your goals cost more than the amount you can save, you have four options:
- Reduce spending
- Increase income
- Reduce the number of goals
- Extend the deadline for goals
If your savings rate exceeds your goals, you might consider adding a new goal or saving more to accelerate your progress toward your current goals.
How to Manage Your Savings
One of the easiest ways to manage your savings is to set up an automatic withdrawal system.
Many banks, especially online banks, allow you to have multiple savings accounts. If this option isn’t available at your bank, or if it’s hard to set up, explore other banks that offer this option.
The easier saving is, the more likely you are to do it, so you want to make the system as simple as possible.
Set up multiple savings accounts and name each account after one of your goals to help you easily track your progress. For example, you could have an account for the wedding, an account for the down payment, an account for car repairs, and so on.
Once
To set up these accounts, link your main checking account to them if they are at a different bank. You will typically be prompted to do this during the setup of automatic transfers.
Once everything is set up, use the numbers from the worksheet to determine the amount to transfer to each account. Set up automatic transfers, preferably right after receiving each paycheck, to make saving as automatic as possible.
Depending on your bank, you can choose weekly, bi-weekly, semi-monthly, or monthly transfers. Choose the option that works best with your payroll schedule and spending habits.
Conclusion
Managing your savings and achieving your financial goals requires planning and organization. Using a budget worksheet, you can define your goals, determine the amounts to save, and compare them to how much you can actually save. Set up an automatic withdrawal system to make saving easier and make faster progress towards your goals.
Source: https://www.thebalancemoney.com/budget-worksheet-savings-goals-453595
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