Last month Stephen Popick shared his home-grown budget spreadsheet with GRS readers. He listened to your suggestions and went back to the drawing board. Here is with an updated version.
Growing up, I was taught the importance of having a budget. It wasn't until I finished college that I understood it. I started reading and listening to financial experts such as John Bogle, Clarke Howard, and a lot of folks in between. Their recurring themes were simply to save as much as you could, live below your means, and choose wisely how you spend your money.
Before I started with my Budget Sheet, which has evolved over the years (and which has been greatly enhanced for GRS), I always thought I budgeted well. Making an actual budget showed that, in fact, I did not. It's amazing how far $50 can be stretched when you're aware of it.
Based on your feedback, this second version of the Get Rich Slowly budget workbook has seen a lot of changes. Here's a brief outline of what you'll find inside.
These two worksheets — one for your budget, and one for your spouse's budget — are designed to be highly customizable. The pale yellow, purple, and shaded green cells are the editable cells. They've been placed in accordance with the most likely expenditure pattern for their category.
Additionally, the Budgets are split between primary expenses and secondary expenses. For the most part, secondary expenses can be considered to be your splurge budget, broken down so you have an expectation of how it will be spent.
New users should enter their actual expenses first in the yellow/purple shaded cells, and then enter their income information (which should all be contained on your pay stub). The final budget line at the bottom of the sheet will tell you the balance. I recommend that the final balance be positive, but not overly so. For instance, having an excess balance of $5 a week yields a fudge factor, in case you can't avoid that box of donuts and coffee with your coworkers.
The retirement planning sheet makes several assumptions that may or may not reflect reality. For instance, it assumes constant returns, steady inflation, etc, steady savings rate, etc. However, it is useful as a guide, to see how much and for how long it approximately takes to get to a certain savings point. Most of the data is auto-fed from the budget sheet. Users can change the rate of return of pre-tax and post-tax investment, the expected inflation rate, and their expected raise rate in the yellow shaded cells.
This simple tool will show the total cost of interest vs. principle, and how various schemes to pay off the mortgage will affect your bottom line. This is a simple form of analysis, and hopefully will become more advanced over time. Use our mortgage calculator to enter your information into the yellow shaded cells. When one position is paid off, you can note the year/month it ends and proceed to analyzing the remainder with a second pull.
This budget workbook continues to evolve. Thanks to all those who have already helped with some great ideas. Please feel free to ask questions or leave comments about the budget workbook here.
Kudos to Popick for all his work on this spreadsheet!