Budget Preparation
Below is a simple one-page budget template in Excel to estimate your monthly income, taxes, and operating expenses (Tab 1). The cells are not locked so that as you gain confidence, you can tweak the template to fine tune your numbers. Currently the input cells are white and the cells with formulas are blue. Do not enter numbers in the blue cells unless you adjust the white cells to calculate accordingly otherwise your totals will be incorrect.
Start by estimating your annual salary. The total taxes are estimated at 25%, but you can fine tune that percent once you get your first pay check. The higher your salary, the higher your tax rate. Then work your way down the list and enter a number for each of your expenses. If you do not know how much rent or utilities will be, you should begin researching what it costs in the areas you are targeting to live. The list is a starting point. If you spend money on something that is not listed, you should add it. If you do not spend money on an item, skip it.
There is also an area to accrue for expenses that come due quarterly, semi-annually, or annually as well as savings for vacations and unexpected repairs and maintenance. Each time you get paid, it is best to set aside that money in a savings account or two.
Once all the numbers are entered, you will see a variance calculation at the bottom of the spreadsheet. If the number is negative, you will need to find a way to cut expenses so that you can live within your means until your income increases over time. If the number is positive, you are good to go. The budget is only as good as your spending stays within the operating model.
The other sheet is a monthly bill tracking sheet (Tab 2). I have found this sheet helpful in not forgetting to pay a monthly bill. I list my bills and note when I pay them. At the end of the month, I scan the list to ensure all bills have been paid and paid on time. It is simple. Keep it simple.