How do you know you are spending more than you should? One of the most overlooked signs of overspending is not knowing how much you spend.
Many people spend their monthly earnings, go deep into their savings and at the end of the month, they wouldn’t know how much went into groceries, housing, transportation, or having fun.
Have a problem tracking your income and expenses?
Maybe you should try a digital budget planner. Yes, a well-structured budget is necessary for anyone looking to organize and manage their finances.
A proper digital budget planner may help you achieve your financial goals, whether you are looking to save up for a big purchase, pay out your debts, or are just trying to stick to a strict budget.
Why You Should Start Using Digital Budget Planners
Instead of the conventional paper and pen we have used to organize ourselves, a digital planner is hosted on ipads, phones or computers. The thing with digital budget planners is how convenient they are.
They are much better at helping you organize your life to the dot. If you are a perfectionist that would love to get everything in your life and, most importantly, your finances organized, get a digital budget planner to help you do the job.
There are many consequences of not organizing your finances. For instance, this 2022 study found that 18% of Americans earning more than 100k were living paycheck to paycheck. Well, there may be many factors to this, but improper budgeting, or not budgeting at all is one of them.
Here is why you should go the digital budget planner way:
- You will always have your device in your hand, whether you are out or at work. You can always refer back to it anytime you make financial decisions.
- You can easily modify a digital planner to suit your needs.
- It saves you so much on the clutter that is notebooks and papers.
- They will help you save much more cash as you can reuse the same template over and over,
- With lots of backup means, you are less likely to lose your digital budget planner,
- You can automate the calculations
- There are a lot of free digital budget planner templates you can download and use.
Also Read: Monarch Money Review
What A Successful Digital Budget Planner Helps You Do
Whether digital or not, a budget planner is a worksheet or template that helps you direct where your money goes. It should help you spend money best while preventing you from sinking into debt.
Either way, a successful budget planner should work well for you. Remember, there is no one size designed to fit all. And this is why you should go digital; you get the chance to adjust your monthly budget to suit your needs.
How Do I Make My Own Budget Planner?
There is no one-size-fits-all regarding budgeting. We all have different earnings, are working towards different goals with different financial needs. This is why you can buy digital planners and adjust them to suit your needs.
Note: Before you transfer the details of everything to your digital planner, start by creating a realistic and workable budget for you. It is the foundation of tracking your money.
Follow the steps below to create a budget for your income, needs and financial goals.
Step 1: Calculate your Monthly Income
Start by getting the figure that is your net income; it is the basis of your budget.
Net income is the pay you take home, not including taxes or other benefits such as health insurance or retirement plans.
Never use your gross income as the basis of your budgeting; you will go overboard. Only budget with what you take home.
What happens when you have an irregular income, like freelancing jobs? You will need to collect all your monthly contracts and use that as the basis of your budgeting.
Step 2: Track Your Expenses
Now that you know what money you bring in, the next step is to figure out where it goes.
Start by listing all your fixed expenses, such as a mortgage, rent, car payments and utilities.
Next, write down the variable expenses. These expenses change from month to month, such as groceries, entertainment, and self-care. Note that variable expenses are a great area that offers opportunities to lower your monthly budget and save more.
If you have yet to record your expenses, use your bank statements or credit card history, as they will itemize your expenses. You can also record your expenses on budgeting worksheets.
Related: Monarch vs Mint: Which is the best budgeting app?
Step 3: Make Clear Your Long-term and Short-Term Goals
Examples of short-term financial goals include:
- Paying credit card debt,
- Setting up an emergency fund kitty
- Paying off student loans,
- Save for a car down payment
Examples of long-term financial goals include:
- Saving up for your children’s college education,
- Saving up for your retirement,
- Paying off large debts, including mortgage or anything you want to achieve in the next 10-15 or 20 years.
With these plans, it is easier to control your spending. For instance, you can easily cut down your spending on groceries and channel the savings to pay off your student loans.
Step 4: Get Your Plans Together
Use your variable and fixed expenses to plan where you will be headed in the next few months.
At this stage, write down your priorities, being realistic to yourself. Break down your expenses to things you want and need in the next few months. For instance, gas may be a need, but daily Starbucks may be a want.
Allocate your money depending on your priorities, needs and wants.
Also, make adjustments depending on your goals, income and spending. If you want to cut down on some expenses, start by looking into your variable expenses, such as groceries and entertainment; It is much easier to cut down on this.
Now that you are working towards a goal set some money that goes towards that goal, and always look for opportunities to achieve the goal.
Remember that even small savings towards the goal always adds up. For instance, cutting down on the $5 coffee per day may seem small, but in the end, it is a step closer to your goals.
Also read: Are budgeting apps safe?
Step 5: Draft Your Budget into Your Digital Planner
Now that you have tracked your spending, variable and fixed expenses, net income, and financial goals, you can feed them into your digital planner.
Remember that your budget is not written in stone. For instance, your expenses can change; you can get a pay rise or even achieve your financial goal and decide to set a new one.
How To Use a Digital Budget Planner
You can download a digital budget planner free on the internet, or customize one on Canva.
Follow these steps to get going with your digital budget planner:
- Download a template or select a spreadsheet program you use.
- Create categories for income, expense items and things you are saving for.
- Select your budget period (weekly, monthly, etc.).
- Enter your numbers and use simple formulas to streamline calculations if you are using a spreadsheet.
- You can add visual aids such a charts and graphs for faster visualization.
