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Budget Planner - How to Create a Budget


Budget Planner 2019 / 2020


The best free budget planner is a budget spreadsheet you can use privately, and will allow you to fill in your personal finance information without needing to use a 3rd-party app. The Money.com.au Budget Planner Spreadsheet is free to download, and can help you start saving money and learning to budget today.

Practical Ways To Save Money

Start a budget that simplify your finances.

Discover why 1000+ people have downloaded this famous Australian Budget Spreadsheet

In this ultimate Budget Planner Guide, we’re going to take you through the budgeting process step by step, and show you how budgeting can be the best decision you’ll ever make for your financial future. If you’d like to learn how to start saving money and achieve financial goals you never thought possible, this guide is for you.


In our Ultimate Budget Planner and Spreadsheet Guide, you will learn:

  • How a budget plan works
  • How you can use a budget plan to save money
  • What to include in your budget plan
  • How to create a budget plan using a free template
  • Budgeting tips to help stay on track and remain motivated in saving money

What is a budget plan?


A budget plan is an accounting tool which lets you easily track your income and expenditure. A budget plan is a crucial part of an effective financial plan, and can be created to track short, medium, or long-term financial goals. You can use a budget plan to save money, pay off debt, or assess long-term goals such as purchasing a home.


A budget plan can initially seem daunting - if you haven’t created a budget plan before, seeing your income and expenses realistically displayed in a spreadsheet can be quite a shock. However, an honest budget plan will be the best way to see how much money you have coming in and going out each week, fortnight, month or year - and help you take complete control of your finances.


Benefits of a Budget Plan


Having a budget that details your income and expenditure will help you to maintain control of your finances and, if necessary, illustrate the problems you may be having with your creditors. It’s true that your debt problems won’t be solved by the fact that you have a budget alone. But beginning with this basic information about the reality of your current situation is essential.


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By listing your debts in a useful budget spreadsheet, you can methodically keep track of your progress to repay them in full.


What to include in your budget


First, let’s cover the basics of what you’ll include in your budget. We’ll discuss these in greater detail further on in the budget planner guide, when we cover the steps to creating your budget using our free budget planner template spreadsheet.


A good budget will outline the following 4 steps:

Understanding these four crucial elements of your budget will allow you to create a budget plan that is easy to use and can help you commit to your savings goals. In this section, we advise you make a list of questions to consider later on when filling out your budget planner spreadsheet.


1. Your earnings


This is how much money you make. Often referred to as ‘incoming money’ – your earnings should outline every known source of income you have, not just your regular salary.


Your earnings should list:

Primary Income Secondary Income Infrequent Income
Salary Rental properties
Share dividends
Term deposits
Secondary jobs
Royalties
Payments from a small business you may be part of

The important task when calculating your total earnings is to be exhaustive - cover as much as you possibly can - as you’ll be doing the same with the next, crucial section: expenses.


If you need assistance, you can use the free Money.com.au Pay Calculator to quickly calculate your take-home pay for easy weekly budgeting.


2. Your outgoing expenses


This is how much money you spend. Assess your expenses by consulting your bank statements, receipts, and financial files. Some expenses are intermittent, such as insurance payments, so to get the most accurate financial picture you can calculate an average for six months to a year.


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Add up everything you spent for the last six to 12 months and then divide by the amount of months, which will give you your average monthly expenses.


Remember that being thorough when you add up expenses is important in creating a realistic budget. A forgotten bill really throws a wrench into your savings plan. When calculating your expenses, also factor in unexpected bills, such as unplanned car repairs.


A good rule of thumb is to add an extra 10 per cent to 15 per cent. For example:

  • You calculate your expenses
  • You estimate you spend $1,500 per month
  • You add a buffer of 15% which is calculated at $225
  • Your new expenses total $1,725 per month

Listing your expenses quickly helps you establish whether you have enough money coming in to cover these. There are also two types of expenses: Fixed and Variable.

  • Fixed (or recurring) expenses are easily tracked, as they are often a set amount on a regular date.
  • Variable expenses are slightly harder to track and may require you to set yourself a daily or weekly budget limit to help cover these. For instance, some days you may buy a coffee – other days you may not. Instead of trying to track these mini variable expenses, you might be better off stating ‘I have $50 per week for variable expenses’ and work towards sticking to this number.
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Tracking your expenses is the most important part of any budget spreadsheet.


Here are some tips to accurately gather your existing expenses to document in your budget:

  • Analyse your credit card statement for spending patterns by categories
  • Analyse how much physical cash you withdraw and spend – try to not use cash ongoing
  • Look to have all fixed expenses debited out of a single account for better tracking

Following these tips will help you document all of your expenses for your budget spreadsheet. It will also help you identify spending patterns and behaviours that could be better managed to save money. These spending patterns and behaviours can be called ‘spending leaks’ - we’re going to change your mindset to look at these instead as ‘opportunities to save’.


You should now have a complete list of your income and expenses, which we’ll use to fill in the spreadsheet in the creating your budget section.


3. Your current debts


This is how much money you owe. To ensure your budget is effective, you need to know where it is you owe money and, importantly, how much your debts are costing you in interest. One of the most popular reasons people decide to start a budget is to assess their current level of debt and find a proactive solution to paying it off early.


As you start to list your debts, consider:

  • Do you have a credit card debt?
  • Do you have a mortgage?
  • Do you have a personal loan?
  • Do you have a car loan?
  • Do you have an investment loan?
  • Do you owe money to someone?

Taking the time to list each of your debts will give you mental clarity on how much you owe and the rate of interest associated with each debt - particularly useful in prioritising which debts to pay off first. You can also use this method to create goals - you could even find ways to pay your debts earlier than you’d have thought possible!


4. Your financial goals


This is what you want to achieve and when. Financial goals may not seem like a vital part of the budgeting process, but listing your budgeting goals will keep you motivated. If your budget spreadsheet tracks your goals clearly, you are constantly reminded of why you are budgeting in the first place.


Even if your goal is just to get better control of your finances and save a little extra each week or month, any sort of budgeting goal will keep you on track.


Looking to deposit some money into a savings account to earn compound interest and grow your savings? Our free Compound Interest Calculator can be used to help you plan your long-term financial goals.


Questions to ask yourself when writing goals:

  • Are you saving for a holiday?
  • Are you starting a budget to pay off your debts faster?
  • Are you saving for your children’s education?
  • Are you saving for a house deposit?
  • What are your short-term goals?
  • What are your medium-term goals?
  • What are your long-term financial goals?
  • Are you saving for retirement?

Whatever the reason, be clear when writing your budget goals. List the goal, the due date and implement a plan to start reaching your goal – step by step. Remember that a budget spreadsheet is there to help you achieve your end goals, so be sure to list them.


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Saving money without a goal is fine, though a well-defined goal can go a long way toward keeping the motivation.


At Money.com.au, our goal in offering a free budget planner spreadsheet is to give everyone in Australia the opportunity to find ways to save money, set realistic goals, and then build them into a budget to show how they can be achieved.

Ready to set up your budget?


The secret to setting up an easy and effective budget is to set yourself long-term goals and use short-term strategies and goals to get there. This will be the basis of setting up your first successful budget.


Learning how to set up a budget should be easy, fun and empowering, so if you’re feeling as though tracking your finances is a struggle, or you’re concerned about not being able to save as much as you’d like to, then take your time to carefully read through this guide.


The step-by-step guide for setting up a budget to save money


Now let’s look at how you’ll go about setting up your budget. We’ll discuss each of these in more detail below, and you can click any of the steps below to automatically take you to the desired section. We’ll use the notes made from the previous section to fill out the appropriate sections of the spreadsheet with your budget information.


Before we begin, make sure you have an accurate listing of:

  • Your earnings
  • Your outgoing expenses
  • Your current debts
  • Your financial goals

We’re going to use this information to fill out the various pages on the Money.com.au Budget Spreadsheet Template. If you haven’t downloaded the spreadsheet, you can do so here. You can refer to Getting Started tab of the Budget Template for a quick guide on each section.


Create your budget in 7 simple steps


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You can use this guide alongside our budget spreadsheet and tips to start your brand-new budget and create a pathway to financial security and happiness.

1. Your monthly income


First, enter the amount of money you make each month - remember to take into account your tax rates and the amount of money you have in hand after tax as we want figures that are raw and accurate as possible to assess your actual in-hand pay.


Once you’ve figured out how much money you need to stay afloat financially each month, it’s time to determine your actual income. Besides your regular salary, get an accurate picture by adding in any extra funds that come your way throughout the year, such as cash gifts, sale of items online or via garage sales, and don’t forget other income sources like alimony, child support, interest, dividends and rental income.


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Remember to include all your secondary income. Whether it be interest payments on your savings or odd jobs you do locally – remember to include them all in your income list.

2. List your fixed expenses


Now we’re going to list your expenses. To make this easier, we’ll first list all your fixed expenses; these will give you a clear overview of your expenditure commitments, and getting these out of the way first will allow you to carefully consider your variable expenses below.


The Expenses Section of the Budget Template is separated into six individual sections, so you can clearly see which areas of your spending are costing you the most:

  • Transport
  • Home
  • Utility Bills
  • Health Care
  • Entertainment
  • Miscellaneous

You can also include your savings account in this list, so that you start to see your savings as another bill to help you reach your goal quicker.


3. List your variable expenses


Once you’ve filled in your fixed expenses, repeat the process for your variable expenses. Variable expenses are items that you spend money on each month that do not have a set value. This can include groceries, eating dinner at a restaurant, buying clothes and going to the movies. These items are variable because they allow you to cut back on them if you wish and are not critical to your monthly budgeting.


The reason we need to list these items is that one of the keys to a successful budget is to factor in some spending on variable expenses so that you don’t lose motivation. If you need help finding your variable expenses, print out three months of your everyday accounts transaction history – this can help you form the basis of where you spend your money on non-essentials.


4. Evaluate your income vs expenses


Congratulations! The hardest part of the setup process is over, so give yourself a pat on the back. Although it’s not directly connected with figures and accounting, staying positive and reminding yourself that you’re doing something proactive in creating a budget is something to be proud of - not everyone is comfortable taking this first, important step!


Now, let’s look at creating what we call ‘zero-dollar budgeting’. This is where we look at the expenses and income together, and find a way to match every dollar you earn to an assigned part of your budget.


Every dollar should be accounted for, whether it be for entertainment or savings – you will want to assign a dollar value to every element of your life - the more concise, the better. By seeing how much money is coming in versus how much money is going out, you should start seeing where your money goes and how you can make small changes.


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Seemingly insignificant items such as a cup of coffee add up over time. For instance, even if you spend just $5 a week on snacks, that adds up to $260 a year, which is not insignificant!


If you find that you cannot match your numbers, you may need to start looking at ways to tweak your budget. Your variable expenses should naturally be the first items to be reduced. Should you find yourself with money left over at the end of the month, you deserve another congratulations! Put the money into your nest egg account and enjoy the fact that you are one of the few people in Australia who manage to not waste their entire paycheck per month.


If you were to find yourself not able to reduce your variable expenses any further, you may need to look at fixed expenses and your options for lowering them. This can be done through refinancing a mortgage, cutting back on extras like Pay-TV and other bills.


5. Track your expenses and see how you spend your money


Now that you’ve filled in the crucial aspects of your budget, and ideally refined your personal budget spreadsheet into a zero-dollar budget, you can start to look at how you’ll track your monthly expenses.


Sections three and four of the Money.com.au Budget Spreadsheet are Tracking and Visual Summary. We’ve used this format because we know everyone is different - some people find it easier to look at numbers, and some people prefer to see their finances represented visually. Whichever option works for you, that’s the one you’ll find most beneficial to continuing your savings goals.


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You can also keep a spending journal or diary, these are amazing at helping you acknowledge just how much money you spend and where it ends up.


Now that we’re tracking our expenses, it’s time to set some Savings Goals. You can use the Time Target Tool to view your savings targets, or the Monthly Savings Tool to see how much you’ll need to save each month to reach new savings goals.


In order to determine realistic savings and debt payoff goals, subtract your monthly expenses from your income:

  • If you determine you’re making more money than you’re spending, congratulations. This amount can be earmarked for savings and to pay off debt.
  • If you determine you’re spending more than you’re making, it’s time to do some cutting so you have something to save and don’t go further into debt. The best way to figure out where you can cut from your expenses is to track your spending and record every expense for a month.

Once you have a clear picture of where all of your money goes, be merciless in cutting expenses until your budget is in the black:

  • Cut enough so that you have 10 per cent to 20 per cent of your income left over each month to add to your savings account.
  • If you are unable to cut a sufficient amount from your budget, consider ways you can increase your income.

By now, you should have an ultra-clear and realistic overview of your finances. You have successfully filled in the budget spreadsheet, and you now have a personal budget of your very own. The next step is almost entirely in your hands: Monitoring your budget and adjusting as you move toward reaching your goals.


6. Adjust your budget to keep control of your finances


These last two steps in creating a budget are dedicated to monitoring and upkeep. We’ve included them in the budgeting guide because they’re just as important as the initial few steps; it’s important to prepare and understand how to adjust your budget to remain motivated even when unexpected things happen.


For example:

  • Your car may need new tyres
  • Your dog may need to have medical treatment
  • Your salary may increase or decrease
  • Your rent may increase

Whatever happens, just remember to add it into your expenses and reassess how you can continue to stick to your budget. Remove things from your variable category for that month so that the money is shifted directly into your emergency requirement.


Events such as a change in your income or accommodation arrangements, a new addition to the family or consolidating your loans all impact on your finances. Your budget will need to change in order to accommodate them, just remember to face any changes with confidence and not bury your head in the sand!


7. Evaluate your budget as your financial position evolves


Ready to begin saving money in a way that can completely change your life and how you view finances? Here’s your first short-term goal: Follow your newly created budget for exactly one month. At the end of the first month, evaluate how you went with your budget.


Ask yourself the following questions:

  • Where did I overspend my budget?
  • Where could I save more money next month?
  • What was the hardest thing about my budget?

Budgeting is the key to saving money. It’s the tool that keeps you honest in your money-saving endeavours; it clearly outlines how much you spend versus how much you earn and quickly helps you keep track of your personal finances with an aim to improve them.


Throughout this first month, you’ll conduct a number of Budget Reviews.


It’s important you review your budget plan regularly, as this will help you make sure you’re sticking to your savings or debt recovery plan and enable you to identify when your budget is no longer meeting your needs.


Bonus Budget Tip: Committing to your budget


One of the hardest things to do is stick to your budget. People often find a burst of inspiration to create a budget spreadsheet, only to never look at it again.


To create a successful budget, you must keep it current and actively refer to it. To keep your budget spreadsheet current, review and update it at least once a week. This means checking in on your spending and always updating your fixed expenses as they increase or decrease.


The moment you cancel say a Netflix subscription, update your budget spreadsheet. The moment your insurance premium increase, update your budget spreadsheet.


Over time you will become confident you are adhering to your budget. As your confidence grows, you will likely only need to refer to your budget each time you get paid!


Excel Budget Planner Template vs App vs Pen and Paper

Practical Ways To Save Money

Start a budget that simplify your finances.

Discover why 1000+ people have downloaded this famous Australian Budget Spreadsheet


So far we have covered the critical components that make up a good budget, and you’ll have likely created your own personal budget spreadsheet. However, in the spirit of being completely fair, we’re going to look at how various methods for creating and tracking a budget compare against each other.


Although we believe the Budget Spreadsheet is the most accurate and easy-to-use budgeting tool available, the best budget tool is the one that works for you and helps you save. Here are the pros and cons of each budgeting method.

Budgeting Methods Pros and Cons

Pros Cons
Budget Spreadsheet
  • Highest level of detail, tracking and forecasting
  • Completely private and secure
  • Highest level of accuracy
  • Offers simple’ and ‘advanced’ expense tracking
  • See beautiful graphs for motivation
  • Can still be stored online via Google Docs (if you desire)
  • Requires Microsoft Excel or Spreadsheet software (though most people have this)
  • Not as easily edited on the go (via your phone)
  • Requires you to manually enter your expenses
Budgeting Apps
  • Convenient (on your mobile device)
  • Potentially automated (can read your bank statements)
  • Always accessible by phone in your pocket
  • Your personal data is stored online, making it open to hacks
  • Some budget apps request access to your bank accounts (bad idea)
  • Difficult to update and manage on small screens
  • Often categorises expenses incorrectly
Pen and Paper
  • None. This method of budgeting is not ideal
  • Not a smart way to track expenses
  • Does not update calculations and totals automatically
  • Easily lost

Free Budget Planner Template Summary


We’ve created the Money.com.au Budget Spreadsheet to be the ultimate budget planner. Our free excel budget planner template:

  • Tracks income from multiple sources, at varying frequencies
  • Tracks every last expense - even the little ones you may miss!
  • Offers ‘simple’ and ‘advanced’ budget options (be as quick or detailed as you want)
  • Has unlimited expense categories and suggests ones you are likely to have
  • Comes with 3 x bonus tools to estimate your savings, figure out how much you need to save and create schedules
  • Creates beautiful graphs to motivate you to meet your goals and continue saving Helps forecast spending and identifying ways to reduce it
  • Is 100 per cent FREE to download and use forever

Why is such an amazing tool free to use? Because we don’t believe it’s fair to charge you money when you are already trying to show commitment to saving and making a positive change in your finances.

How do you get the Money.com.au Budget Planner Spreadsheet?


It’s super simple - you can follow this link to download the free Money.com.au Budget Planner Spreadsheet.

Do I have to pay for the Money.com.au Budget Spreadsheet?


No. You will never have to pay a single cent to use our spreadsheet. We know we could charge for this valuable tool, but we’re committed to helping everyday Australians take control of their finances. We believe our Money.com.au Budget Planner Spreadsheet can truly change the way you view your finances, and your dedication to making this future a reality is the only investment you ever need to make.


Practical Ways To Save Money

Start a budget that simplify your finances.

Discover why 1000+ people have downloaded this famous Australian Budget Spreadsheet


Budgeting FAQ


What is a budget planner?


A budget planner is a way to track your income and expenses. Creating a budget plan allows you analyse the amount you are earning vs the amount you are spending, and helps in balancing your income. A budget plan is also crucial for setting financial goals, and is a popular way of learning how to manage or repay debt.


How do I use a budget to manage debt?


Many people start a budget is to assess their current level of debt and discover ways to either manage their debt obligations or pay debts off early. A budget will display your income vs expenses, and allow you to quickly view where you can make changes to allocate extra cash toward additional repayments, or where you can cut back on expenditure to free up cash flow.


Will the budget spreadsheet work on my computer?


The budget spreadsheet is made in Microsoft Excel. It is able to work on all formats of Excel. If you have Excel installed on your computer, this will work for you. Otherwise, you can upload the spreadsheet to Google Drive and use Google Sheets to fill out the template.


Can I make a budget plan by myself?


You certainly can, but using a budget template will make the process far easier, especially if it’s your first time budgeting. There are also lots of spreadsheets available on the internet, though there are no free templates that are as concise or useful as the one we offer here.